Chris Hornby Mortgage Adviser

Chris Hornby Mortgage Adviser

Buy To Let Mortgage

Advice & Recomendation

If you’re buying a property to rent out, you’ll need a buy-to-let mortgage. A buy-to-let mortgage works differently to a residential mortgage on a property you’re planning to live in. Buy-to-let mortgages are usually offered on an interest-only basis, which means the capital debt – the amount you’ve borrowed as a mortgage – will only be cleared at the end of the term. Most residential mortgages are capital and interest loans, where your monthly payments cover the interest and a portion of the debt, and the value of the loan plus interest is gradually paid back over the deal period. Landlords with a buy-to-let mortgage usually expect their monthly mortgage payments to be covered by the rent they receive. But you could experience problems with rent collection or have months with no tenants and no rent. So, buy-to-let mortgages are seen as higher risk by lenders, and as a buy-to-let borrower you’ll need a bigger deposit, you’ll face higher fees and a higher rate of interest.

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