Buy to Let Mortgage

Understanding buy-to-let mortgages

Buy-to-let mortgages are designed for property investors and private landlords who do not intend to live in the property. Rental income and property values are not guaranteed, so it is important to consider both the potential rewards and the risks.

A lender’s decision may be based on the rental potential of the property as well as your personal income. Deposits are commonly higher than for residential mortgages and interest rates may also be higher.

Income, growth and ongoing costs

Before buying, consider whether your objective is monthly income, longer-term capital growth or a combination of both. The decision may affect the type and location of the property you choose.

Costs can include:

• Property maintenance and redecoration
• Letting-agent and management fees
• Ground rent and service charges on leasehold properties
• Buildings, contents and legal insurance
• Furniture and appliance safety inspections
• Tax and additional property purchase costs

Tax treatment depends on individual circumstances and may change. Appropriate tax and legal advice may also be required.