This is only a brief summary. For the full guide click below.

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Buy-to-let mortgages are specifically designed for you to borrow money to purchase property for renting out privately.

Most lenders now require evidence of sufficient income, at least £25,000 to £35,000. They will usually lend up to 70% to 75% of the property’s value.

Lenders use a calculation to determine how much rent would be required from your property for them to lend you the money (the final percentage can vary up to 140%):

mortgage amount  x  loan pay rate  ÷   12 (months)  x   125%  =   monthly rent

For example:

£125,000   x    5.99%   ÷   12 x 130%  =  £811.15 per month required

Arrangement fees for buy-to-let mortgages are often between 1% and 3% of the amount borrowed.

Posted in Buy-to-let, Guides, Mortgages