Buy to let mortgage rates

When buying a property as an investment then the most common way to purchase is by using a buy to let mortgage. It is therefore important that you get the best buy to let mortgage rates possible. The better the rate then the better your cashflow will be each month as you will be spending less on your monthly mortgage payment.

Buy to let mortgage rates are not the only figures you need to look at when choosing a mortgage, you also need to take into account the mortgage fees that are associated with any buy to let mortgage rates.

Firstly you have the valuation fee which is paid to a RICs surveyor to come out to the property in order to give it a capital value and rental value. The amount payable for this does depend on the lender you use and can often be hundreds of pounds different form one lender to another even though it’s the same valuation!

Secondly the amount of arrangement fees a lender charges can also have an impact on the how good the buy to let mortgage rates are. Lenders usually charge an arrangement fee as either a flat amount or a percentage of the loan. For example on a mortgage of £100,000 if it was a 2.5% arrangement fee then that would equate to £2,500. As this amount can often be added to the loan it is important you calculate your buy to let mortgage rates based on the increased amount which in this example would be £102,500.

Buy to let mortgage rates are not the whole story.

So the moral of the story is, it’s not all about rate. You need to consider all the different costs as well as features of a mortgage you may want. For example if you wanted a mortgage that had no arrangement fee and no early redemption penalty then your buy to let mortgage rates may be higher than if you didn’t mind a mortgage with an arrangement fee. So cost alone and buy to let mortgage rates alone shouldn’t be used to decide which is the most suitable mortgage for you.

Finding buy to let mortgage rates

There are a number of places to find the best buy to let mortgage rates. You can often find a few in the Sunday newspapers in the best buy table OR you can go online and search.

The key however to find the best buy to let mortgage rates, is to use an impartial mortgage broker who is familiar and experienced in buy to let mortgages. They will have access to most of the high street banks but as importantly they will also have access to many specialist buy to let mortgage lenders who are not on the high street. They can search through the different buy to let mortgage rates taking into account the impact of mortgage arrangement fees on your cost and then present you with a number of choices, obviously taking into account other criteria you need as well as the actual buy to let mortgage rates.

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Shared Ownership mortgages

It can be difficult for first time buyers to get their foot on the property ladder and buy their first home. There are however a number of different options available to you should you be in this position. Shared ownership mortgages are one solution that might be the perfect way to solve the problem.

Shared ownership mortgages were created in order to help you get on the property ladder. They are essentially part rent, part buy schemes which are very popular with first time buyers.

The availability of shared ownership mortgages has reduced since the 2008 credit crunch, and the ability to get what is effectively a 100% mortgage has got very tough.

When you buy a shared ownership property you are buying a percentage share of the property. This can be anything from 25% to 50% of the property. The positive aspect of this scheme is that it allows you to buy a property you may not currently be able to afford and it also allows you to increase you share in the property at a later stage if you want.

On the negative side it does mean that should the property increase in value you will only get a percentage of the capital growth.

Find Shared Ownership mortgages

These mortgages are not available from every lender and are in fact specialist mortgage products that only a few offer. To find these shared ownership mortgages you can either go into the branch of a high street bank, browse the mortgage magazines and papers or the path we recommend is to speak to an independent mortgage broker.

If you walk into a bank then the only shared ownership mortgages they will be able to offer will be their own which may not necessarily offer you the best product. If you speak to an independent mortgage broker then they work for you and therefore can search the “whole of market” in order to find the most suitable shared ownership mortgages.

The benefits of shared ownership mortgages

In summary shared ownership mortgages mean that you require less deposit in order to secure a property compared to an outright purchase. Its also means you only need to secure a mortgage of 25%-50% of the purchase price and also the ongoing monthly costs can be up to 50% less than buying the property outright.

If you think that this way of buying could be beneficial to you then the next stage is to get the finance in place. You can speak to an independent mortgage broker who will be able to take all your details, check your eligibility for the scheme and then advise on which lender and mortgage products would be the most suitable for you.

Once you’ve found a suitable mortgage product you are then in a position to look for a property. In this way you know that you are eligible for a mortgage and you can concentrate on find the perfect property for you. This is the real benefit of shared ownership mortgages.

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Buy to let mortgage

If you are looking to buy a property to let it out as an investment then you can use a buy to let mortgage to help fund the purchase. A buy to let mortgage has been specifically designed to enable you to buy a property as an investment as opposed to living in the property.

The amount of money you can borrow on a buy to let mortgage usually depends on two key factors.

Firstly they will have a maximum loan to value. Loan to value means how much the loan is as a ratio to the value. So for example if your purchase price was £100,000 and you were looking for a 75% loan to value buy to let mortgage then that would equate to £75,000

The second factor which determines how much you can borrow is the rental income that the property generates. Many lenders don’t necessarily look at your income to determine this; however they may have a minimum income that they require from you. Instead they look at the rental income and apply a calculation to work out how much you can borrow. For example a common calculation is that the rent needs to be 125% of the mortgage payment, so if your mortgage payment was £500 a month you would need a minimum rent of £625 a month to get the buy to let mortgage amount you need.

Finding a buy to let mortgage

As there are a number of different factors you need to consider when finding the most suitable buy to let mortgage it can take a lot of time and hassle to secure the right one. This is where an impartial mortgage broker can help. They are able to search through all the different lenders, look at all the different rental calculations and work out which buy to let mortgage product will be the most suitable for you.

Often you will find that there are buy to let mortgage products that are not available on the high street and that the only way to access them is through a mortgage broker, therefore it is really important you contact one to let them search the market for you.

They can look at both high street banks and specialist buy to let mortgage banks which give an extra depth to your buy to let mortgage search.

Finding a buy to let mortgage broker.

If you use the contact form above then we will put you in touch with an impartial mortgage consultant. They work for you and not for any bank, so when you tell them what you are looking to do they are able to search the market for you and present to you their findings on which buy to let mortgages are most suitable. This saves you both time and hassle.

It also enables you to do what you’re best at which is find the right property at the right price and allow the experts to find the best buy to let mortgage for you.

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Buy to let mortgages

When looking for the most buy to let mortgages there are a number of factors that need to be considered, as they differ from the traditional mortgage that you would get for your own residential property.

Firstly the loan to value’s on buy to let mortgages tend to be lower. You can get 80% loan to value buy to let mortgages (and even 85% ones) however at the moment most lenders have a maximum of 75%. The lower you reduce the loan to value the greater number of buy to let mortgages are on offer.

Secondly you need to take into account the rental calculation that buy to let mortgages have. The majority of lenders, rather than using your income to determine how much you can borrow, look at the amount of rental income you will receive. This rental figure is worked into their rental calculation and the amount of money you can borrow is calculated.

Finding buy to let mortgages.

As you can see finding the best buy to let mortgage is not always easy.

However rather than trying to search yourself, working out all the different rental calculations for each lender and comparing costs there is an easier way.

Using our contact form we can put you in contact with an impartial, professional mortgage consultant that is experienced in buy to let mortgages. They will be able to look at your situation, listen to what you want to achieve and then find the most suitable buy to let mortgages.

Using a mortgage broker for buy to let mortgages

A mortgage broker is able to take all your details and research the buy to let mortgages market, as well as give you initial advice as to what type of buy to let mortgage you would like. Whether that is interest only or capital repayment or you are looking for a long term fixed rate mortgage or a short term variable rate.

There are many, many buy to let mortgages available in the mortgage market, and the real; skill of a mortgage broker is to determine what you are looking for, research all the buy to let mortgages on offer and then present to you with their findings. At the same time to give you advice in what to look out for and consider before signing up with any of these buy to let mortgages.

As well as the most suitable types of buy to let mortgages you must of course also consider the costs. The interest rate quoted by mortgage lenders is only half the story. You need to consider the cost of mortgage arrangement fees, valuation fees and any incentives that the mortgage lenders sometimes give.

Consequently it is important to get the overall costs of buy to let mortgages rather than the headline rate when deciding which mortgage to apply to.

Since the credit crunch buy to let mortgages are now increasing in popularity and certainly the number of buy to let mortgages on offer is also increasing.

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Using a mortgage calculator uk

When using a mortgage calculator uk there are a number of things you need to be aware of to make sure you are using the mortgage calculator uk to its greatest advantage.

There are a great number of mortgages available on the market today and it is difficult to know which mortgage is right for you. One of the most common ways you can determine which is the best mortgage is by measuring cost – this is where a mortgage calculator uk comes in very handy. It enables you to calculate how much your monthly payments would be, depending of course on a number of variables.

Your monthly payment amounts will be depend on whether you opt for an interest only calculation or a capital repayment one – this can dramatically change the amounts on a mortgage calculator uk.

On interest only you only pay the interest amount of the loan. The capital is usually paid separately by way of an investment vehicle, for example an ISA or Unit Trust.

On capital repayment your monthly payment from your mortgage calculator uk will include both the interest and some payment towards your capital – this invariably measns the monthly payment will be higher.

Mortgage calculator uk – what to look out for.

When deciding which mortgage to go for you should always consider other factors as well as cost. A mortgage calculator uk may tell you the monthly cost but will not be able to give you the benefits of the different types of mortgage products. For example fixed rates may work out as more expensive than variable rates but then they are guaranteed not to rise in the period it is fixed for.

Also there may be other features like overpayments, an offset facility or even payment holidays which may be more suitable for you but ultimately may be slightly more expensive.

So let me tell you about an alternative you can use instead of trying to work out the best mortgage for you. Instead of using a mortgage calculator uk you can engage the services of a professional to do this on your behalf – take away the hassle and let a professional do it for you.

Alternatives to the mortgage calculator uk

Of course you don’t need to find and use a mortgage calculator uk yourself in order to get the best rates. You can employ the services of an impartial, professional mortgage broker. They will be able to search the market for you and effectively use their own professional industry calculators to work our which is the most suitable mortgage for you.

They will be able to send you mortgage illustrations (better known as key facts illustrations) which will have all the calculations included in the illustration, telling you what you initial monthly payment would be and what you payments would be once you have finished your initial fixed or tracker promotional period.

So as well as using a mortgage calculator uk you can complete the form above to get in touch with a professional mortgage broker.

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