Buy-to-let (BTL) mortgages are specifically for individuals who wish to buy residential property which they intend to let out to tenants.
The Financial Conduct Authority do not regulate some buy to let mortgages.
Eligibility and lending criteria
Most banks and building societies (and some other financial institutions) offer BTL mortgages, but terms, conditions and costs vary enormously.
Some mortgage providers will not lend to individuals who are under 25 years of age or earn less than £25,000 a year.
Flats, newly built property and former local authority-owned properties can be unacceptable to lenders. Lenders may also restrict the number of BTL mortgages a borrower can have with them at any one time. Or the lender may impose a ‘cap’ on the total amount of BTL funding they are prepared to advance to a borrower.
Affordability
Affordability for a buy-to-let mortgage is based on several factors which include:
The property income (factoring for dormant months when there are no tenants in the property) and interest payable.
Deposit
Typically, the highest loan-to-value (LTV) mortgage available on a BTL basis is 75% — i.e. you will need a deposit of at least 25% of the property’s purchase price to proceed. There is the potential for a deposit of less than the amount but this will be subject to your personal circumstances. Borrowers who are able to put down substantially more than the minimum 25% deposit (40%+ for example) will usually qualify for more favourable rates of interest.
Buy-to-let property – Stamp Duty Obligations
When buying a property, there may be an additional cost paid to the government, known as Stamp Duty, which is dependent on the price of the property being purchased. When buying a property that will result in you owning more than one, a surcharge of 5% is added on top of the stamp duty you would normally be paying in England and Northern Ireland.
Arranging a buy-to-let mortgage can be complicated. We understand the requirements necessary to access a competitive buy-to-let mortgage and have helped many individuals to invest in property as a long-term opportunity.
A let-to-buy mortgage can be complicated as it involves refinancing your existing property based on the potential rental yield, whilst simultaneously finding a new residential mortgage to fund the onward purchase of a new property.
Add to this the fact that buy-to-let mortgages are generally interest only, with rates usually being higher than on residential deals, together with the challenges of becoming a landlord and you will realise the importance of getting the correct advice and assistance.
The benefits of a Let to Buy
Please call us today and we will use our many years of experience to advise you on the best way forward in your circumstances.
Limited Company Mortgages require specialist lenders as the structure of these loans can be complicated. We are well versed in dealing with this product and are able to offer mortgage assistance for those buying rental properties through a limited company
Who is a limited company mortgage for?
Landlords who own more than one property may find tax benefits by operating their buy-to-let property portfolio through a limited company. These property investment companies are known as Special Purpose Vehicles (SPV) and lenders have developed specific products for this specialist lending. Anyone choosing to buy property through a limited company will require this type of mortgage.
Our SPV Mortgage Services
We offer limited company mortgage advice and brokerage for those considering a SPV Mortgage for:
Through our SPV mortgage advice and services, we can help you locate the right deal and assist with complex matters regarding your SPV company and property. Contact us to hear more about limited company mortgages and how we can assist you.
Clients must be on UK soil to receive advice.
Expat mortgages – Are you an expat considering your mortgage options? Whether you’re looking to remortgage or purchase a new property, Expat finance could be a smart move. You can take advantage of lower interest rates, potentially lowering your monthly payments. It also offers you the chance to raise capital from your property, providing extra funds for investments or personal needs. Additionally, mortgage finance can help manage currency fluctuations, a common concern for expats. It’s crucial to choose an adviser experienced with expat financial situations—we can guide you through the process smoothly and help you secure significant savings. Make sure your mortgage works for you, wherever in the world you are!
At Novus Financial Solutions, we are committed to offering mortgage advice that aligns with the latest tax structures and regulatory guidance. Our approach involves close collaboration with trusted third-party experts to structure mortgage deals that are both efficient and advantageous. By leveraging our extensive network and expertise, we ensure that our clients benefit from the most favourable and compliant mortgage solutions available. Our team is dedicated to optimising financial outcomes, taking into account each client’s unique circumstances and goals. With Novus Financial Solutions, you can trust that your mortgage plan is strategically designed to maximise benefits while adhering to all relevant tax and legal guidelines.
Tax treatment varies according to individual circumstances and is subject to change.
Novus Financial Solutions is a trading style of ASW Associates Ltd which is an appointed representative of Quilter Mortgage Planning Limited which is authorised and regulated by the Financial Conduct Authority.