Over the last few years, property has been seen as a good long-term investment as part of a balanced portfolio. Finding the right investment or buy-to-let mortgage is essential. Whether your goal is rental income or capital growth our experts at Knight Frank Finance have access to a wide range of lenders so that they can find the deal that is just right for you.
Buy-to-let mortgages are unlike the mortgage you might take out for your own home. For instance, unlike other mortgages with a buy-to-let mortgage how much you can borrow does not depend on how much you earn. On the other hand, the interest rates on buy-to-let mortgages tend to be higher as do the arrangement fees.
You might also have to put down a larger deposit – usually 25 per cent of property value. Many buy-to-let mortgages are interest only – something that is relatively rare for residential mortgages. You’ll need to ensure that the rental income is at least a quarter more than your monthly mortgage payments.
You’ll have to make sure that you can meet those mortgage payments even if you have periods when the property is empty and if interest rates rise. As with residential mortgages there is a variety of different options including fixed rate, variable rates and trackers.
“The buy-to-let market is undergoing significant changes at the moment with tax deductions becoming less generous so it’s more important than ever that you get efficient financing,” says Ben Sheriff, Partner at Knight Frank Finance.
“We’re also seeing the growth of corporate buy-to-let with more investors setting up companies to handle their buy-to-let investment properties. Here too this requires specialist advice to get the best deal.”
Read our buy-to-let mortgage guide for more information on the types of mortgages available to you.
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