Buy-to-let mortgages are for investment properties.
As with regular domestic home loans there are many products on the market ranging from special offer deals to fixed and variable rate loans. With a buy-to-let mortgage some lenders will only consider your rental income when offering a mortgage, while others will place more emphasis on your normal earnings, especially if you only have one or two rental properties.
Your expected rental income must exceed your mortgage repayments by a certain percentage. For example, your mortgage lender may require a rental income of 130% of your monthly mortgage payments. Your lender will also want to establish whether the property you are buying is a good long-term investment. So buy-to-let mortgages are subject to the usual status checks. Generally buy-to-let mortgages are available for between five and 45 years and for up to 80% of the property value, although some lenders will go higher.
When considering a buy-to-let it is also necessary to bear in mind any additional costs such as letting agent's commission, insurance premiums for building and contents cover and rental and legal expenses cover, the costs of keeping the property in a suitable condition for letting, service charges and ground rents if the property is leasehold.