As property demand continues to explode, many landlords are returning to the sector, as well as first-time rental businesses leveraging Mortgage Rates existing properties.
There are now more buy to let mortgages than ever, but it can be complex to determine which products offer the best value for money – and which high street bank to apply to.
Today, Revolution Finance Brokers has put together an overview of the current rates and terms available from some of the best-known lenders and advice from independent experts.
Low Buy to Let Mortgage Rates Available Through Mainstream Banks
Exact rates and terms vary considerably, depending on your credit record, the value of the property you’d like to buy, and the anticipated Mortgage Rates rental income.
Still, to provide a summary, we’ve listed below some of the offers available.
For this illustration, we’ve worked on a property worth £160,000, with a 30% deposit – a mortgage requirement of £111,000 over 22 years.
We’ve used an interest-free buy to let broker example, Mortgage Rates so please note that term costs exclude the capital borrowed, which remains payable at the end of the agreement.
The APRC refers to the annual percentage rate of charge or the total interest payable over the whole loan period.
It’s vital to understand the intricacies behind these headline rates, which aren’t necessarily as transparent as they could be.
For example, that third RBS product looks attractive due to the lower interest payment per month. However, the actual terms are 60 monthly payments of £303.40, followed by 204 monthly payments of £321.90.
The term cost also looks great, but the real repayable total is £195,316.60 (against a £111,000 mortgage), including other fees of £445 and early repayment penalty clauses.
Which Buy to Let Mortgage Incentives Are Worth Having?
One of the stumbling blocks for so many landlords is that they see a range of incentives, such as:
Removing all upfront fees
Providing a cashback offer
Giving free valuations
Offering complimentary legal work
Although such incentives are becoming less common, they can be deceptive because, without digging down into comparable costs and like-for-like comparisons, an incentive used as a marketing tactic can look more favourable than it is.
We’d always recommend you speak to an independent, whole-of-market broker before you apply for a conventional buy to let mortgage product – in many cases, there are far more profitable products out there.
The difficulty is that some of the best buy to let lenders offer bespoke products and don’t deal with the public directly.
An experienced broker can very likely direct your mortgage application to a buy to let specialists with excellent terms, outstanding interest rates and a comprehensive understanding of the rental market.
Comparing Buy to Let Mortgage Offers From the Biggest UK Banks
While a price comparison site or an advertised offer from a bank might tempt you, the other consideration is that these rates do not take your circumstances into account.
You only qualify for the best buy to let mortgages if you pass the eligibility assessment with flying colours; hence, you need to have your application assessed by an independent broker who can steer you in the right direction.
As a few examples, we’ve looked at some of the prominent UK banks and the policies they apply to all buy to let mortgage applicants.
HSBC Buy to Let Mortgages
HSBC will only lend if you are a UK resident and earn at least £25,000 outside your rental income.
Maximum loans sit at 75%, and you need to earn a minimum of 145% of your interest-only repayments to be considered.
Barclays Buy to Let Mortgages
Barclays refuses any applicant under 21, although they’ll lend to joint applicants provided there are three parties, and all are over 18.
Lending is capped at £2 million on buy to lets, and you can borrow up to £1 million but need to earn a salary of £25,000 and invest in a residence worth more than £1 million to qualify.
NatWest Buy to Let Mortgages
NatWest will consider applicants up to an upper age cap of 70, with a deposit of at least 25% of the property value – or 35% if it’s a new build.
Homes eligible for buy to let mortgages must be worth over £50,000, and you cannot finance an HMO rental investment.
Choosing the Right Buy to Let Mortgage Lender
If you’re unsure which banks will approve your buy to let mortgage application or would benefit from independent advice to select the optimal lender, please get in touch.
Revolution Finance Brokers are wholly independent, giving us the professional flexibility to recommend lenders within and beyond the scope of high street lending that we feel are ideal for your mortgage prospects.
Call the team on 0330 304 3040 or email us at email@example.com to schedule a convenient time to talk.