What you need to know about 65% LTV Buy to Let mortgages
Buy to let mortgages at 65% LTV
Although a 5% difference in deposit may not seem like much if you look at it in percentages, it represents a great deal to buy to let mortgage lenders. By coming below the 70% loan to value ratio you represent a much lower risk to mortgage lenders, and therefore you will find that your costs can also be significantly lower. Although the interest rates are roughly similar, the place where you are going to see the biggest difference is in the arrangement fees. These fees for 65% LTV buy to let mortgages generally range from £1000 to around £2500. Although there are mortgages in this range that charge percentage fees, they are not as common as for the higher LTV mortgages.
Why it is worth finding that extra 5%
If you possibly can it is definitely worth either finding that extra 5% deposit or waiting until you have it. The reason for this is that you will save a great deal of money compared to taking out an initial 70% LTV mortgage. In order to get the best 70% LTV interest rates you will be limited to two year fixed rate deals. At 65% loan to value you will find that you will have more options regarding the length of your fixed rate deal, with three and five year deals being more numerous. The lower arrangement fees can also save you thousands, particularly if your loan size is substantial. The final benefit is that a relatively high proportion of 65% buy to let mortgages do not have early repayment charges, which provides you with the option of overpaying your mortgage and so reducing your monthly payments even further.
You could also find deals that offer you lifetime variable rates that sit below the lender’s variable rate in order to encourage you to keep your mortgage in the same place for the duration of the mortgage.
How to choose the best mortgage
Selecting the most appropriate buy to let mortgage is not easy as there are so many things you have to take into account in order to figure out which one will give you the most for your money in your particular circumstances. A specialist buy to let mortgage broker is well-placed to provide you with all of the information you need and can also provide advice and comparisons of various mortgage options.