What is Buy-to-Let?
A buy-to-let mortgage is the type of funding used on a rental property.
The laws surrounding affordability calculations has been subject to change as of late, and some lenders can implement these changes more rigidly than others, which is why now it is crucial to enlist the help of our experienced mortgage consultants.
BTL lending is not regulated by the FCA unless a close family member will be letting the property.
The use of BTL finance can seem self-explanatory. However, this adaptable set of products can do more than your average mortgage:
This branch of BTL is assessed with the same rigid criteria as a residential mortgage, as “landlords of circumstance” are viewed as consumers and need to be protected as such.
A let-to-buy allows you to purchase a new property while renting out your previous residence. The amount a lender is willing to lend is calculated by rental coverage and does not take your existing mortgage into consideration.
The are many positives to refinancing. Whether you are looking to raise funds for a light refurbishment or purchase a new property, the equity stored in a rental property can prove useful. Refinancing could also prove lucrative with those looking to save, enabling landlords to transfer to a lower rate product.
Whether the transaction is straightforward or a more unusual arrangement, our highly talented team will be able to assist you.
Product panel highlights
- Up to 85% LTV
- Max loan size £25m
- HMOs and unusual property types considered
- 1st and 2nd charge accepted
- First-Time Buyer, First-Time Landlord and Limited Company options available
- Low Yielding Rental Properties
- Overseas clients (Expats and foreign nationals) considered
- Place cases that have been declined elsewhere
Examples of use
- Two estate agents had purchased 4 properties at auction over the last 6 months. These had been refurbished and now let. We arranged limited company buy to let finance at just 4.59% to 75% LTV to refinance to new value and allow a capital raise to purchase more properties..
- Client based in the US looking to refinance 2 of his 3 HMO properties to release one from the loan. The loan was arranged to 75% LTV on two out of three, leaving one unencumbered at just 4.19%.
- A client approached us with a portfolio of 11 investment properties with 9 different lenders and payments at different times of the month. We consolidated this on to one portfolio loan to include a capital raise to purchase additional properties.
The rates in these examples are historic and were offered based on the buyer’s individual circumstances at the time. The rates you may get will depend on your own individual circumstances and may differ from the rates in the examples.
Key terms explained
- Stress Rate A calculation used by lenders to determine how much they will give to a borrower.
- HMO (House in Multiple Occupation) A property occupied with 3 or more tenants which form 2 or more households, that share amenities.
- Stamp Duty Stamp duty is the tax applied on the transfer of assets or property.
- Yield By converting the years rental income into a percentage of the property’s cost, the yield is the annual return likely on an investment property
- LTV (Loan To Value) Expresses the ratio of a loan to the value of an asset purchased
- Let-to-Buy A mortgage that allows you to purchase a new residence, while letting your previous home out.
- Portfolio Landlord A landlord with 4 or more investment properties.
- Portfolio Gearing a way to describe the equity level held within a portfolio, giving an indication of the debt against its value. The lower the gearing, the more equity is held.
- Pay rate The interest rate applied to the mortgage to calculate monthly payments.