Summit Mortgages
Buy to Let
Whether you’re a first-time investor or an experienced landlord, we can help you with mortgage borrowing, deposit requirements, repayment options, and other considerations, including the possibility of purchasing properties through a limited company or as a portfolio landlord.
Trying to buy to let?
How We Can Help
With a shortage of properties creating demand in the rental sector this can be an appealing prospect. Whether you’re looking to venture into the investment property market with a first purchase, or are an experienced landlord, we can assist with suitable advice on your mortgage borrowing.
How lending works with
Your Deposit
You’ll be required to fund a larger deposit for a Buy to Let purchase, this can be as little as 20% but for the majority of lenders you can expect to put down a 25% deposit.
Whats your
Affordability
For a Buy to Let mortgage, affordability will generally be assessed against the rental income of the property to ensure this is self-financing, this is beneficial for the lender but also for yourself as the landlord so it can be ascertained that your purchase would likely be a good investment.
A mortgage lender will ‘stress test’ your mortgage interest rate to account for fluctuations and rate increases and then use this to calculate your mortgage payment for affordability purposes. There would then be an expectation that your rental income would be 125%-145% in excess of this. This would accommodate other property expenses, such as; repair and maintenance costs or covering periods of rental voids.
Advising you between
Interest Only or Capital Repayment
As an investment purchase you will be able to decide whether you’d prefer to repay the balance of your Buy to Let and benefit from unencumbered ownership further down the line, or, opt for an interest only arrangement with lower monthly payments, possibly supplementing your regular monthly income.
With Interest Only being the most popular arrangement it’s important to add that you’d need to have a repayment strategy in place so the mortgage can be redeemed.
Although, this may be as straightforward as selling the property at the end of the term. In either case it’s important to assess your goals and circumstances to find the right arrangement for you.
Whats a
Let to Buy
If you’d like to retain your current residential property and let this out, in addition to purchasing your new home, this is a variation on a Buy to Let mortgage. We’re experts in this area and can offer you plenty of information and advice to see if this might be viable opportunity.
Whats a
Limited Company Buy to Let
It may be possible for you to purchase your Buy to Let as a Limited Company or a Special Purpose Vehicle (SPV). The suitability of this depends on your specific situation and it would be wise to seek guidance from a tax advisor before proceeding. It may be the right decision for some individuals, while for others, it may not be financially viable. Consider whether you intend to purchase a single Buy to Let property or build a large portfolio.
Are you classified as a higher rate taxpayer? What are your ultimate objectives? It’s crucial to consult with a specialised Buy to Let broker like us to establish a comprehensive plan from the outset. By doing so, you can determine your goals and set a strong foundation.
How we can help
Portfolio Landlords
Once you have ownership of 4 or more Buy to Let properties you will be identified as a Portfolio Landlord and it can be complicated to navigate through the different criteria. There are additional checks confirming your; assets and liabilities, cashflow, landlord experience, existing mortgages and current incomes. Therefore, let us provide you with our expertise to guide you through and offer you mortgage advice to suit your circumstances.
Your property may be repossessed if you do not keep up repayments on your mortgage. Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority.
