Buy to Let Mortgages UK Buy to Let Mortgage Property Rental Calculator
UK Buy-to-Let Mortgages Guide
Commercial or residential buy-to-let UK property can provide good rental yields and asset growth. This has been achieved in the past and is usually seen as a good investment for the future. Buy-to-Let usually delivers a good income and asset growth over the shorter term where rapid increases have been experienced in this market.
Buy-to-Let Rental Calculation
The rental income is usually the means of supporting the mortgage payments. Traditionally, buy-to-let mortgage products require the rental income to be equal or greater than the mortgage payment, known as ‘Rent to Interest Cover’. These are calculated in percentage terms. For example: 100% equals the mortgage payment or with an additional percentage loading of between 110% and 150%. This means that achievable rents need to be 25% to 50% higher than your mortgage interest payments.
Buy to Let Mortgage Calculator
Where you've a Buy-to-Let property in mind the following calculator will provide some idea of cost in relation to the percentages illustrated and criteria you are looking for.
Buy-to-let Mortgages - High Street Vs Independent Broker?
As interest rates can vary from lender to lender the advantage of using an independent mortgage advisor as opposed to a high street bank is that an independent broker 'MCI Brokers Ltd' has access to search the whole market providing an extensive range of mortgage products from a variety of lenders ensuring you receive the most competitive product to suit your needs. Where as, a high street bank usually provides a limited range of 'Buy to Let' products. Visiting a number of high street banks to obtain a reasonable selection of products can take a considerable amount of time. An Independent Mortgage Broker 'MCI Brokers Ltd', will take the hassle out of getting the product that best suits your needs. You have the comfort factor that all lenders and their products have been searched by 'MCI Brokers Ltd'.
When choosing a suitable buy-to-let mortgage it's easy to suffer information overload from all the products on offer and miss the most suitable mortgage product. An independent mortgage broker can assist you by helping to pinpoint the product that won't fall foul of your needs.
Buy-to-let Mortgage Deposit
Buy-to-let mortgage lenders will require a deposit. The norm is 25% of the property value but this can be higher; usually, the larger the deposit the lower the interest rate. A larger deposit will provide a much broader range of buy-to-let mortgage products.
Buy-to-let Mortgage Costs
For those venturing in to this market for the first time there are a number of financial liabilities and commitments you will be undertaking. Before entering in to these we recommend you consider the following:
- Is the property in a suitable area to command the required rental income to support a mortgage
- Type of tenant(s)
- Suitable mortgage product for your needs
- Deposit
- Lenders monthly interest rate
- Property Insurance
- Management costs
- Access to tradesmen in the event of emergency
- Energy Performance Certificate (EPC)
- Gas Safety Certificate
These can be more extensive, some will have time periods. The key points highlighted above are some of the basics, although we recommend you discuss your buy-to-let property in depth with a professional adviser for mortgage purposes 'MCI Brokers Ltd' and a letting agent to the clarify the landlord's responsibilities.
Although there are many financial benefits of investing in the buy-to-let market it's always wise to make provision for any periods your property may be vacant, it would be wise to keep aside, for example, up to 3 months rent to cover mortgage payments along with any agents fees or other unforeseen expenditure that may arise.
Buy-to-let Remortgage
As with any commercial venture the owners will review their business strategy regularly. Where necessary a remortgage of a Buy-to-Let property may become necessary for many reasons. Before undertaking this, the cost for doing so should be considered, for example:
- Are there any redemption fees on the existing mortgage product
- Will there be a suitable mortgage product
- Costs - See 'Buy-to-let Mortgage Costs' above
Buy-to-let Management Agent
Using a lettings agent they will usually charge the approximate costs base on the rental income:
- Full management service will cost 10-15%
- To find a tenant 5-10%
- Rent collection 8-10%
Rental Property
People looking to rent property fall into many categories from a landlord's prospective. Landlords usually specify a category they want, for example:
- Professional people are normally looking for a one or two-bedroom property and ideally within commuter distance of a major town or city.
- Houses for students will normally have multiple bedrooms, a property near a college or university are ideal.
Landlords may also specify the type of tenant they don't want. These specifications can be found in the advertising media or a letting agent will usually advise.
Summary
It is important to be aware that whether your buy-to-let mortgage is from a high street bank or an independent broker both will require supporting evidence to ensure this cost is affordable and that your asset value has sufficient security for the lender.
If you are looking to take out a buy-to-let mortgage, MCI Brokers Ltd will work on your behalf in finding the most suitable mortgage product to suit your needs.
In addition, MCI Brokers also specialize in commercial mortgages, commercial remortgages and property development finance for commercial and residential property at market leading rates and terms. As an Independent commercial mortgage broker we have the ability to negotiate with a mortgage lender on your behalf enabling us to get the best deal for you, so why not call one of our experts today.
