Individuals secure a Buy-to-Let mortgage on a property they will rent out. They have become increasingly popular and are no longer limited to professional landlords. The costs and rates are different from standard mortgages.

Furthermore, lenders base approval criteria on personal circumstances and expected rental income. To simplify the process of finding the right mortgage, we recommend seeking professional advice.

The popularity of Buy-to-Let mortgages has led to a wide range of options for borrowers. There are many resources available to compare rates and conditions and find the right mortgage for your needs.

However, comparing mortgage options is not as simple as just- looking at tables. Different borrowers have different priorities and factors to consider, such as mortgage duration, deposit amount and rental income.

Specialist lenders may offer deals that are not listed publicly. For Buy-to-Let mortgages it’s best to consult with an experienced mortgage broker. They can consider your needs and recommend suitable options from a variety of lenders.

Buy-to-Let mortgages are usually available to people who already own a home, although there are lenders who will work with those who own property to rent out. It may be more difficult for first-time buyers to get this type of mortgage, but not impossible.

Mortgages are also available to limited companies created specifically for property rentals. However, it’s important to understand them and seek advice from a qualified professional.

This is an age-old question and there are various options that you can think about.

1.   Turning your property into a HMO (Home in Multiple Occupation) can really make the rental yields shoot up. This option can work quite well, as effectively, you can rent on a per room basis. You will have to seek the correct permissions from the Local Authority and also be willing to service a number of individual tenants in one property.
2.   Look for properties that have good rental yields. Purchasing a property for say £250,000 may seem like a good idea as you may be able to rent it for say £850 per month. However, purchasing two properties for £125,000 each that rent for say £550 per month will provide you with more profit in the long run against the money you havThis is an age-old question and there are various options that you can think about.
   1. Turning your property into a HMO) can really make the rental yields shoot up.
   2. Look for properties that have good rental yields. For example, purchasing a property for £250,000 may seem like a good idea as you may be able to get £850 per month. However, purchasing two properties for £125,000 each that rent for £550 per month will provide you with more profit in the long run.
   3. Getting the right mortgage advice is just as important when looking to maximise your rental profits. An experienced mortgage broker can help you access the most suitable mortgage rates for your needs. Remember, the cheapest rate isn’t always the best. You must always consider the lender’s arrangement fees and other associated costs.
   4. Choosing an interest-only mortgage over a repayment mortgage is another way to boost your rental profits. While a repayment mortgage will reduce your balance over the course of the mortgage, it does eat into the profit you make. An interest-only mortgage means you will only pay the interest element of your mortgage.
   e invested. Your investment will also be split over two properties which will also split the risk of having void periods where you may not have a tenant in a property.
3.   Getting the right mortgage advice is just as important when looking to maximise your rental profits. An experienced Mortgage Broker can help you access the most suitable mortgage rates for your needs as well as compare the small print. The cheapest rate isn’t always the best rate when you take into account the lenders arrangement fees and other associated costs. Getting the right product can sometimes mean the saving of several thousands of pounds over the course of a mortgage.
4.   Choosing an interest-only mortgage over a repayment mortgage is another way to boost your rental profits. While a Repayment Mortgage will reduce your balance over the course of the mortgage it does eat into the profit you make on a month to month basis. An interest-only mortgage on the other hand means you will only pay the interest element of your mortgage payment every month to the lender. This is a lot less than the amount you will have to pay on a Repayment Mortgage which in turn will leave you with more profit on a month to month basis.

There are pros and cons to both types of mortgages hence why it is important to get the correct professional advice.

The choice between a fixed rate and a tracker rate mortgage depends on how risk averse the landlord is. A fixed rate offers stability but may have a slightly higher interest rate, while a tracker rate may be cheaper but carries the risk of rising with the Bank of England base rate.

Typically, lenders design Buy-to-Let mortgages for individuals purchasing or remortgaging a residential investment property. They also usually occupy their own home, with or without a mortgage.

It may be harder for first-time buyers, but not impossible. Mortgages are also available to limited companies, with eligibility requirements varying between lenders. ‘Limited company’ Buy-to-Let products will suit certain individuals more than others.

It’s good to seek advice from a qualified accountant or tax specialist before deciding.

Buy-to-Let mortgages are available for various property types, but some properties may require a specialist approach.

Leasehold properties are acceptable if the lease has at least 70 years remaining. Lenders generally do not consider mobile homes and houseboats suitable as security.

Certain types of properties, like studio flats and ex-local authority flats, may require a specialist lender. Lenders may also consider other properties in the same area.

Each lender has a different approach, so it’s important to discuss your situation with a specialist. They can help you find the right solution and avoid multiple rejections.

The short answer is yes. Leasehold properties are similar to freehold properties if there is a suitable lease in place. However, leasehold properties have additional costs such as ground rent and service charges. The remaining term of the lease can affect the property’s value and eligibility for a mortgage.

Lenders consider leasehold charges when calculating the affordability of a loan. It is important to be aware of ongoing costs and potential increases that could limit investment income. Lenders are less willing to accept leaseholders with a significant stake in the freehold.

Buy-to-Let mortgages have higher costs compared to regular mortgages. Buy-to-Let mortgage rates are higher and lender completion fees can be up to 3% of the loan.

Most borrowers choose an interest-only basis for tax efficiency and budgeting purposes. This implies that the loan capital remains constant, leading to the payment of more interest over the term. It’s important to seek advice to ensure the mortgage matches individual circumstances and objectives.

Investors typically purchase a Buy-to-Let property for the rental income and property value increase. Consider ongoing costs such as income tax and capital gains tax. Recent changes in tax calculations have led to an increase in popularity of limited company Buy-to-Lets. It’s important to seek professional tax advice to understand how these taxes affect you.

As a landlord, you have a legal responsibility to your tenants and must budget for property maintenance. If you have an HMO, there may be additional costs.

Managing the property yourself can keep costs down, but using an agent will incur fees. If getting a Buy-to-Let mortgage for a limited company, remember you’ll be subject to corporation tax. Registering the company and hiring an accountant will also have costs.

There will also be costs for your initial purchase. These are likely to be, but not limited to:

• Solicitors’ fees.
• Mortgage arrangement fee.
• Property survey.
• Stamp Duty – this will likely be inclusive of the higher second property surcharge.
• Mortgage broker fees where applicable.
• Decorative costs/improvements. – these may be a necessity to ensure you comply with Minimum Energy Efficiency Standards (MEES) introduced in April 2018.

Having a mortgage is a necessary cost for many Buy-to-Let investors. It should be factored into your budget, including during periods of rental voids.

The minimum deposit needed for a Buy-to-Let property purchase is generally 25%, although some lenders may accept 15% deposits. However, lenders rely on the property’s rentable value to determine the amount that can be borrowed.

If the rentable value is lower than the required mortgage amount, a larger deposit may be necessary. Some lenders also factor in overall affordability, allowing other income to cover any rent shortfall. This is referred to as “top slicing”.

Buy-to-Let investors need to consider mortgage costs and monthly payments when budgeting. Many mortgages have an end date, after which the loan reverts to a higher standard variable rate.

Borrowers can choose to remortgage with another lender, but the current lender may also offer a product transfer. IMC Mortgage Brokers considers both options and recommends the best choice for the borrower’s needs. The main factor is the overall cost, but there are additional benefits to staying with your current provider.

There are calculators available to help with borrowing needs, like ours. When determining the loan amount, lenders consider the rentable value of a property. A buy-to-let calculator can give an indication of borrowing potential based on rental income. This can help investors determine the deposit needed for an investment property

Buy-to-Let mortgages are complex and require specialist advice. Lenders have different criteria, so it’s important to choose the right one. Applying to too many lenders can harm your credit rating, so it’s best to use a mortgage broker who understands the market.

At IMC Mortgage Brokers we can help you find your ideal mortgage, providing you with essential Buy-to-Let mortgage advice that can help you obtain a mortgage product.