Buy-to-let Property
Buy-to-let Property
BUY-TO-LET MORTGAGE LENDING CRITERIA
If you’re looking to purchase your buy-to-let property by using mortgage finance, then there are some key points that you should consider. This section will give an insight into mortgage finance.
- You must be over 18 – Some lenders require you to be 21 or over
- Earn a minimum of £25,000 a year
- You’ll need to be younger than 70 or 75 at the end of the mortgage term
- Have a good credit score
- Be an existing homeowner
Please note that the criteria does change slightly between different mortgage lenders. Therefore, it’s important to find out what the buy-to-let mortgage criteria are when enquiring with a lender.
HOW MUCH CAN YOU BORROW?
Most mortgage lenders require you to put down a deposit of at least 25%, though this can vary between 20-40% depending on the mortgage lender you choose. In most cases, you will only be able to borrow a maximum of 75% of the property price when securing a buy-to-let property.
When buying off-plan property, some lenders require a larger deposit. However, many are happy to lend with a 25% deposit.
For overseas investors, the lending criteria are slightly different. Typically, you will need to have a larger deposit. Though this depends on your foothold in the UK currently.
Investors should note that since 2016 there has been an increase in stamp duty for investment property. Currently, there is a 3% surcharge. For overseas investors, the stamp duty is even higher.
Since 2020 there has been a change in the way that interest mortgage rate relief is calculated. As a result, many investors are finding that investing via a limited company is the most cost-effective way to buy investment property. However, lending criteria can change when applying for mortgage finance through a limited company.
If you are unsure of how any of these factors affect your prospective investment, please speak with a member of our team, who will be happy to assist you with your inquiry.