Buy to let

A buy to let property is one that is owned with the intention of renting it out to tenants, as such the type of mortgage that is required works a bit differently to that of a standard residential mortgage.

Most buy to let mortgages require a 20-25% deposit and will operate on an interest-only repayment plan, this means that, for each month of the mortgage term, you’ll only pay the interest on the loan, and none of the capital, this is often the preferred method of repayment for buy to let as lenders also tend to require that the rent being charged on the property is around 25-30% over and above the monthly mortgage payments.

Stamp duty is also charged differently on buy to let properties, as well as the standard stamp duty fees, there are additional surcharges attached to buy to let properties depending on their value and they are as follows: Up to £250,000 = 3%, £250,001 – £925,000 = 8%, £925,001 – £1.5m = 13%, £1.5m+ = 15%. Buy to let properties are also not eligible for first time buyer exemption in relation to stamp duty.

You may want to convert your existing residential property into a buy to let and purchase a new home, this is known as a let to buy. Essentially, it is a remortgage whereby you raise additional funds for the deposit of a new purchase and your existing mortgage is converted into a buy to let mortgage.

Whatever your buy to let needs are, our expert advisers are here to help with any queries that you might have.