Buy-to-let mortgages are used to buy property, which is then let out for a monthly rental charge used to cover the mortgage.
Mortgage providers view buy-to-let mortgages as riskier than standard mortgages due to potential issues with occupancy and rent collection. Because of this, you’ll need to pay a bigger deposit, with a higher rate of interest. There are also a range of rules and regulations that will need to be considered.
Getting a buy-to-let mortgage is slightly harder than applying for a residential mortgage. You must:
- Already own a home, either outright or with an existing mortgage
- Fit the age criteria – usually lenders set an upper age limit of either 70 or 75. This refers to the age that you will be at the age of the mortgage term.
Becoming a buy-to-let landlord can be profitable. However, there are additional fees that you’ll need to factor in, such as:
- Rent insurance
- Landlord insurance
- Letting agents’ fees
- Contingency for when the property is unoccupied, repair bills etc.