What to expect from 50% LTV Buy to Let mortgages
Buy to let mortgages at 50% LTV
If you are in the enviable position of having a 50% deposit to put down on a property that you wish to buy to let you will actually find that there are very few mortgages that reward you for this. You will usually find that the lowest loan to value ratio that is used to restrict mortgage deals is 60% loan to value. However, you should not think that the extra 10% deposit will not do you any good.
Is it worth using the extra 10% deposit?
There are a number of reasons why you should use money available for a deposit rather than doing anything else with it. The first is that because the interest rates are still so low on any savings scheme, you will actually save far more by using it as a deposit than you will gain from investing it. Also, the additional deposit will also make you far less of a risk to lenders and so you will find that the application process becomes smoother. You will also find that even if you are on a lower income you are much more likely to get a buy to let mortgage if you have a 50% deposit.
How much can I borrow?
The amount you can borrow will vary between lenders, but if you have a deposit of 40% or more the usual lending amount is between £500,000 and £1,000,000. As with all buy to let mortgages you need to be aware of any arrangement fees, especially if they are a percentage of the loan amount. A fixed fee can be as low as £1000, but a percentage fee can be anything up to 3.5% of your loan, which can significantly increase your costs.
Get all of the information
Whatever you do, never make assumptions about the terms and conditions of a buy to let mortgage. Most require an assured shorthold tenancy in order for you to let your property, which means that if you are planning to allow short term lets you will have to make sure that your mortgage provider allows this otherwise you could have your fixed rate retracted and could even be forced to sell the property for breach of terms. If you are in any doubt you should seek the advice of a specialist BTL mortgage broker to make sure you are aware of all of the details.
