BTL Mortgages
In very simplistic terms, these are types of mortgages or loans raised by investors to let out a residential property for income. Most real estate investors will start with either buying a property to let out or turn their existing primary residence in to a BTL property. These properties can be either bought personally by the investors or through a limited company. Over the recent years, buying through a limited company has become very popular for tax and inheritance planning reasons. Good news is there are many lenders in the market at the moment with standard criteria to lend on residential properties that will be let out. As always we advice our clients to complete their due diligence on the location, property itself, figures and long term objectives before purchasing any investment properties. We regularly help our clients fund these properties through BTL mortgages, guide, help them with structuring the deal and find a right lending solution.
BTL Mortgages can be split into various categories:
- Standard Residential BTL mortgage
- Houses of Multiple Occupation BTL mortgage
- Holiday Let or Serviced Accommodation/Apartment mortgage
- Property let out to a council or social housing provider
Typical terms:
- Loan to Value (LTV): 75% to 80%
- Lenders want the monthly rent to cover 125–145% of the mortgage payment, depending on whether the property is bought individually or through a company
- Rates: Varies, however lower than commercial mortgage.
- Product Fee: Varies from £999 to 5%. Typically, 3% fee is standard.
- Term: 5 to 30 years
- Some lenders have no admin fee and free valuation
