Buy to Let Mortgage Advice, Torquay, Paignton, Exeter, Plymouth & Devon
Buy to Let Mortgages
Buying a property in order to rent out has become both fashionable and for some a very profitable form of income/investment. But it has to be said, that Buying a property to Let is not for everyone. There is much to consider (not just the mortgage) in all respects of the decision to invest in Property.
When you have made the decision that you wish to consider a Buy to Let mortgage, or a Let to Buy (if you are planning on renting out your own residence) then be sure to speak to me about the deals and offers available from the whole of the market.
Basics on how a Buy to Let is calculated.
Traditionally, a lender will want to see that your rental income will cover the mortgage interest by circa 140 to 145% at a rate specified by the lender sometimes the pay rate it a long term fixed or circa 5.5%
HOWEVER!, All lenders are different and there may some variations in these according to their criteria at that time.
You will also find that Most lenders require that the applicant will have been an experienced landlord and that they have a minimum income requirement.
For the most up to date information and help in arranging your Buy to Let mortgage, be sure to give me a call to help you.
Help is available for all buy to let options – HMO (House of Multiple Occupancy), Students, Investment, Portfolios & professional landlords.
As a simple guide, I have devised a Buy to Let Calculator see if your rental income will cover the mortgage at the above 140/145% rule.
Taxation on Buy to Let Properties
It’s worth bearing in mind that there are some taxation facts that need to be considered when buying or owning a property in which you let out.
- The income you receive from your buy to let property will be taxable at your highest marginal rate (ie: if you are a higher rate tax payer, then this income is assessed at that rate)
- The interest that you pay to your lender on your buy to let mortgage can be used reduce this income (tax deductible) although this legislation is subject to change in the coming years.
- Your repairs and maintenance costs of the property can also be tax deductible as to can be letting agent fees, ground rent and other expenses.
- The value of the property is likely to be assessed for Capital Gains Tax when you sell your property.
- There is an additional stamp duty to pay on the purchase of a secondary property (residential or Buy to Let) of 3%. This is in addition to the normal Stamp Duty payable as a normal purchase.
NOTE: all data above relating to lenders criteria is a guideline as each lender has different criteria and often changes, for full information and an indication as to whether your situation will be accepted, please call me. The tax status is correct at the time of publishing.