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Published on : September 4, 2019 15:54


The Edward Mellor guide to Buy to let mortgages

Whether you’ve been through the process of getting a buy to let mortgage before or not, this guide will answer some of the fundamental questions, filling you with knowledge and confidence before you embark on your next property adventure.

It’s probably no surprise to you that getting a buy to let mortgage is different to a regular mortgage.

Read on for everything you need to know and how we can lend a helping hand.

What is a buy to let mortgage?

A buy to let mortgage is a loan you take out to buy a property and/or land that you’re going to rent out. Interest is charged on the loan.

The mortgage is secured against the value of the property, which means it can be repossessed if you don’t keep up the repayments.

Provided you know what you’re getting yourself into, there’s profit to be made investing in buy to let properties.

Once you’ve paid your monthly mortgage bill, anything left over from your rental income is potentially profit – and if the property increases in value over time you could sell and take advantage.

What’s the difference between a mortgage and a buy to let mortgage?

Buy to let mortgages tend to have higher rates of interest and the initial deposit usually needs to be bigger than if you were buying a property to live in.

Buy to let mortgages are usually interest-only too meaning your monthly repayments don’t actually pay off the loan – just the interest on the loan.

The logic behind this is that your outgoings will be lower and profits can be maximised. This is referred to as rental yield.

Although your monthly repayments will be lower you will still need to pay the loan off at the end. You could do this by selling the property, or simply remortgaging.

If you’re paying the mortgage with your tenants’ rent money, you need a plan for periods when you don’t have any tenants in the property. There are specialist insurance policies link that will cover your rent during these periods.

How much does a buy to let mortgage cost?

There are a number of costs that come with getting a buy to let mortgage.

Your deposit will typically need to be worth at least 25% of the property’s value.

The greater the deposit you put down, the less you’ll have to borrow meaning your monthly repayments are likely to be lower.

Depending on which country of the UK you’re buying in you’ll need to pay Stamp Duty or Land Transaction Tax.

These taxes are based on the value of the property. Stamp Duty is higher on buy-to-let purchases than your standard purchase.

As a landlord, you may be liable for other kinds of taxes too, such as income tax and Capital Gains Tax. We can advise you on everything you need to know tax-wise before taking out your buy to let mortgage.

How to choose a buy to let mortgage?


Our expert mortgage advisors will help you make the right choice when it comes to your buy to let mortgage. We will compare buy to let mortgages from over 50 lenders and recommend the best one for you.

In the same way that there are lots of different regular mortgages to choose from, there are plenty of different buy-to-let mortgage options too.

We will help you make the right choice between fixed rate deals, variable rate mortgages and capped rate deals. A capped rate deal is where the repayments can change but never exceed an agreed amount.

Can I remortgage a buy to let property?

If you’re looking to get a better deal or release money from your buy to let investment to make improvements and potentially increase the rental value of your property, remortgaging is a great option available to you.

Just like with a regular mortgage, if your fixed-rate buy to let mortgage is coming to an end, you’ll likely have been switched onto a more expensive traffic known as a Standard Variable Rate (SVR).

Although buy to let mortgages might seem a little more complicated than a regular mortgage, we can help you find the right buy to let deal, whatever your circumstances.

Get in touch with our friendly team of experts on 0161 0161 443 4830 or click here to fill in a contact form.

Related Links

The Edward Mellor guide to remortgages

Up-tick in mortgage lending throughout 2019

Find out how much you could borrow with our mortgage calculator

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