Buy to let mortgage
Buy to let mortgages explained

How does a buy to let mortgage work?
If you are buying a property to rent, you will need a buy to let mortgage. Buy to let mortgages are very similar to residential mortgages, but with some key differences:
Buy to let mortgage deposit: Due to the increased risks involved with renting property, you will generally need a 25% deposit for a buy to let mortgage. It is however possible to get a mortgage with a 20% deposit and if you want to access the best buy to let mortgage rates, you will usually need 40% of the property purchase price.
Income: Most buy to let mortgage lenders will need you to receive between 125% and 145% of your monthly interest payments in rental income and earn a minimum £25,000 a year.
Age: With the average mortgage lasting approximately 25 years, many lenders have an upper age limit of either 70 or 75 years old. To stand the best chance of getting approved for a buy to let mortgage, you will therefore generally need to be 45 years or younger at application.

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How to get a buy to let mortgage
Whether you are buying your first rental property or an experienced landlord looking to expand your portfolio, our buy to let mortgage brokers can help you find the best buy to let mortgage for your needs.
They will take the time to understand your financial goals and compare thousands of deals from the UK’s leading buy to let mortgage lenders, to find the perfect deal for you. When you are ready to apply for your new buy to let mortgage, they will also handle the entire process from start to finish to remove the stress and hassle from you.
If you are interested in exploring your mortgage options, simply get in touch or request a callback here and one of our expert advisors will contact you at a more suitable time.

Landlord fees
When you invest in property there are a few additional costs you will need to consider, aside from your buy to let mortgage.
- Letting fees for landlords
Landlord letting agent fees
If you decide to use a letting agent to manage your property, you will need to pay them a fee to do so. They can carry out credit checks on perspective tenants, draw up contracts and chase any unpaid rent, which will usually cost you between 10 – 17% of your monthly rental income.
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Stamp Duty Land Tax (SDLT)
An extra 3% is charged on top of the standard stamp duty rates for all additional property purchases. From 8th July 2020 to 31st March 2021 the amount you will need to pay is as follows; 3% up to £500,000, 8% for the portion from £500,001 to £925,000 and 13% for the portion from £925,001 to £1.5 million.
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Capital Gains Tax (CGT)
If you sell your buy to let property and the profit you make from the sale is more than £11,700, you will need to pay Capital Gains Tax. If the property is jointly owned, the threshold increases to £23,400 and you will have to pay either 18% or 28% tax, depending on your tax bracket.
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Landlord insurance
Whilst it is not mandatory to have contents and liability cover, landlord insurance will protect your property and its contents, and also provide additional cover should a tenant or visitor die or sustain an injury whilst in your property.
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Maintenance costs
As repairs to the property are your responsibility, you will need to set aside a budget for these.
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The Financial Conduct Authority does not regulate most buy to let mortgages. Fosters Financial Ltd act as a credit broker not a lender for landlords insurance.
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