How Buy to let mortgages work

As a general guide the first requirement you will need to consider is the deposit amount that you have available, most lenders will require you to place a deposit of 25% of the purchase price to achieve the best deal. Some will allow you to reduce the deposit to 15% but then charge you accordingly.

The second part of the equation is calculating the level of rental income against the monthly mortgage repayments on an interest only basis. Most lenders will require the monthly rental income to equate to 125% of the monthly mortgage payment.

Then your own circumstances will be taken into consideration, often in the same way that a normal residential mortgage is underwritten. Your personal income details will be required, a check on your credit record will be conducted, and any other mortgages or financial commitments will be taken into consideration.

Some lenders will not accept an application from “first time” landlords, and all will have a maximum financial amount that they will advance any individual towards building a property portfolio.
All of these circumstances and more must be taken into account by your Buy to Let mortgage adviser before they can offer you the advice that you need.