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