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Best Buy To Let Mortgage Deal, Compare Buy to Let Mortgages, Which is the Best Buy To Let Mortgage Rate UK

Buy to Let Mortgages

The essential difference between Buy to Let mortgages and the conventional residential mortgage is that whilst the viability of the latter will depend largely upon one’s salary the former is based almost wholly upon rental income.

There is a very simple reason for this. Other than under exceptional circumstances one would only contemplate letting out a second home, and therefore the borrower’s likely disposable income will already have been factored into the decision to grant the mortgage on the first property. In order to sustain a second property it would be necessary to have a second income connected to that property.

Typically a lender will ask for evidence of rented income in the region of 125% of the mortgage payment. Naturally this is additional to an initial deposit. A borrower who can satisfy these requirements will usually, subject to status, have demonstrated the feasibility of the additional mortgage.

As with residential mortgages, Buy to Let mortgages can be obtained on a fixed rate, tracker or variable rate basis.

All have their advantages and disadvantages relative to the others, however the fixed rate option is considered particularly attractive to many landlords as the rental income itself is fixed and a regular profit without risk from market fluctuations is thereby assured.

The effect of the credit crunch on the Buy to Let market has generally been to drive it towards the larger operators, leading many landlords to merge or to become state-owned. Loans are less freely available than was once the case and ancillary charges and start-up fees have often to be factored in. Generally it is the case that the larger the loan the lower, proportionately, the costs will be.

No direct tax relief is available on Buy to Let mortgages, but it is possible to offset interest payments on a mortgage against tax on rental income, along with many other expenses such as maintenance costs and agents' fees.

Anybody making money on a Buy to Let property sale over and above the annual capital gains tax limit is obligated to pay Capital Gains Tax at the flat rate of eighteen per cent.

One final point is that conditions laid down by Buy to Let lenders are likely to vary and these should always be taken into account when sourcing loan funding. For example the property may be required to meet certain standards in respect of its overall condition, there may be a stipulation that it is not to be sub-divided into multiple self-contained units and a maximum number of Buy to Let properties may need to be adhered to.

If you are currently looking for an affordable buy to let mortgage quote, try some of the mortgage websites above and begin your buy to let mortgage search.

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