Buying a property to let can be a great way of gaining an additional income as it could reap considerable financial rewards over time. It can even be an exciting challenge if developing the property yourself.

When buying a property to let, it is important for you to consider your primary objective.

For example, are you looking to make an income based on a month on month profit? Or are you using this property as a long term investment with the intention of increasing the property’s market value to make money in the medium to long term?

Your buy-to-let mortgage deal will depend on this.

What are you looking for?

Buy to let purchase calculator

How does a buy to let mortgage differ?

There are 3 main differences in buy-to-let mortgages:

  • Rent potential – The decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. However, in some cases your income will not be considered.
  • Interest rates – Buy-to-let mortgages have slightly higher interest rates.
  • Deposit – Typically, a minimum of 25% of the property’s value is required as a deposit.

Buy to let remortgage calculator

Additional information

Did you know that, in addition to your monthly mortgage repayments, there are many extra costs involved in property management?

Additional costs include:

  • Property upkeep: potential maintenance costs for the property.
  • Letting agent’s fees: letting agents will charge for finding and vetting tenants.
  • Stamp duty: in 2016 the government announced that anyone looking to buy a property to let will have to pay an increase on their stamp duty tax. Please refer to the stamp duty calculator to find out how much you’ll be expected to pay on your property.

  • Ground rent or service charges: applicable to leasehold properties.
  • Insurance – building insurance to cover property repairs.
  • Furnishings – If the property is to be let-furnished, make sure you are covered for this by your home insurance.
  • Gas / electrical appliances – you should consider the cost of maintaining appliances and ensuring they comply with any regulations such as safety tests.
  • Interior costs – the property may require work ranging from painting, to a new bathroom suite before it is suitable for letting to tenants.

Please note that we’re unable to provide tax advice in relation to buy-to-let mortgages.

If you require more information on this, please contact a qualified person in the field in your local area