What is a Buy To Let Mortgage?
Buy To Let (BTL) mortgages allow the purchase of a property, for it to be let out, Mortgage Adviser Newport.
Buy to Let’s can include:
- Family Lets – properties let out to families,
- Holiday Lets – properties purchased to be let out via Airbnb for example,
- House of Multiple Occupation (HMO) – let out to several students or professionals,
- Limited Company Buy to Let’s – this is the purchase of a property via a Limited company.
What are the key differences between a normal residential mortgage and a Buy To Let mortgage?
- The fees and interest rates tend to be higher on Buy To Let mortgages.
- Most Buy To Let mortgages are not regulated by the Financial Conduct Authority (FCA),
- The minimum deposit for Buy To Let mortgages is usually 25% of the value of the property.
Buy To Let mortgages have increased in popularity over recent years.
The main reasons for this increase in popularity are:
- An additional income stream,
- Potential for capital growth of the property,
- Can help to towards effective retirement planning,
- More lenders have entered the market, resulting in more competitive products,
- High demand for rental accommodation due to an increase in the UK population, a growing number of university students and an increase in single occupancy homes due to a high divorce rate.
The Financial Conduct Authority do not regulate buy to let mortgages.
Your home may be repossessed if you do not keep up with repayments on your mortgage.
Think very carefully before securing debts against your home. Your mortgage is secured on your home. If you do not make your mortgage payments, you could lose your home.