Buy To Let

This is a mortgage designed for people who wish to purchase a property as an investment and rent it out to others. The Lender would normally require you to put down a deposit of 25%.

Lenders also apply a “stress test” to the monthly repayments to ensure that you are not over-stretching yourself. For this reason most ‘seasoned’ investors take out interest only Buy to Let mortgages in the expectation of property values increasing. The value of houses can do down, as well as up, as we saw in the early 1990’s and in the last 2 years. Talk to us first if you are thinking of buying an investment property.

Some lenders will allow you to build a portfolio of investment properties. The ability to repay this type of mortgage is often based on the projected rental income from the property as opposed to the personal income of the borrowers. Be aware that because this is classed as an investment, you could be liable to pay income tax on the rental income from the property and also pay Capital Gains tax on the sale of the property.

The Financial Services Authority does not regulate most Buy To Let arrangements.