Some great rates available in the Buy to Let sector
At the time of writing, there is some quite serious competition in the Buy to Let sector! Our good friends at Foundation Homeloans have just launched a 5 year fixed rate, sub 3.50%, with a 2% lender arrangement fee. This is a really impressive move by the lender. Not only that, but with Buy to Let properties, the mortgage is usually based on the rental achievable. Lenders calculations vary but generally working on a rental income of 125% at a ‘stress test’ rate of 5%. Foundation’s product works on 125% of the actual pay rate (if you are purchasing in a Limited Company name). This makes a huge difference in the amount of mortgage loan achievable. Maximum loan allowed on this product is 75% of the property value.
With Buy to Lets, the minimum deposit can be as little as just 15%. At this level, there are only a few products. With a 20% deposit, the numb er of products increases substantially, as do the options with a 25% deposit, and so on. And rates are now so low that there’s actually not a huge gap between Buy to Let rates and normal Residential rates, as there used to be.
As the new taxation changes are implemented, we are seeing a lot more people purchase properties in a Limited Company name. This sounds complicated, but any good property accountant will be able to advise you at the early stages if this is more beneficial to you, rather than buying in a personal name. The most important thing is to ensure any property investment versus outlay gives you the best return possible.
Finally, it doesn’t matter whether you an experience landlord, or this is your first time. Property ownership can be complicated, so explore all the options and shop around. There are a huge number of lenders available to you and all have competitive edges and good criteria options for the right customer. Make sure you understand everything at the outset so you don’t regret it later! Always seek professional advice.