Buy to let mortgages are for investment properties
As with regular domestic home loans there are many products on the market ranging from special offer deals to fixed and variable rate loans. With a buy-to-let mortgage some lenders will only consider your rental income when offering a mortgage, while others may place more emphasis on your normal earnings, especially if you only have one or two rental properties.
Your expected rental income must exceed your mortgage repayments by a certain percentage. For example your mortgage lender may require a rental income of between 100% and 130% with the most common percentage being 125% at this time. Your lender will also want to establish whether the property you are buying is a good long term investment. So buy-to-let mortgages are subject to the usual status checks. Generally buy-to-let mortgages are available for between five and 45 years and for up to 80% of the property value.
Since the Government announced the hike in Stamp duty during its Autumn Statement, we have seen a short term increase in the amount of BTL mortgage business as investors rush to purchase and complete before the March 31s. For the interim this rush continues to fuel property prices, however the mortgage industry expects to see a decrease in new loans to landlords after the April 1st deadline.
How the new stamp duty to first and Buy to Let/second home applies: