Buy to Let mortgages - all you need to know
Base Rate Tracker - Key features
The interest rate charged tracks Bank Base Rate for the mortgage term.
- Up to 75% LTV (Flats 50% LTV)
- Rental coverage 125%
- Minimum advance £50,000
- Maximum advance £375,000 per property, £500,000 per borrower
- Minimum property value £75,000 (£100,000 ex-local authority properties)
- Fixed rates are available to both personal and limited company applicants
- Minimum age of 18 for main income earner
- Maximum age of 70 at end of mortgage term
- No early repayment charges
First-time Landlords
First-time landlords need to meet all of the standard criteria and have a personal income that covers all outstanding mortgages including the proposed Buy to Let mortgage. Affordability is calculated by using residential income multiples 3.75 x single or 2.6 x joint income, 75% of the annual rent receivable from the Buy to Let property can be included in these income calculations. The costs of outstanding credit commitments will be deducted from usable income before applying the multiplier.
Example:
Single applicant
Existing residential mortgage of £80,000
Proposed Buy to Let mortgage £60,000
Annual rental income on Buy to Let mortgage £4,200 x 75% = £3,150
Personal income £35,000 + £3,150 = £38,150
£38,150 x 3.75 = £143,063
Advance
- No property developers, self-certification, DSS, ex-pats, foreign nationals, asylum seekers or diplomatic immunity applications
- Minimum age 18 for main income earner (must fit min. £25k income)
- Non main earner – 18yrs as per residential criteria
- Maximum age at end of mortgage term – 70 years
- England and Wales (not Scotland or Northern Ireland) Freehold and Leasehold (with 50 years left at end of mortgage term)
- 6 to 12 month Assured Shorthold Tenancy - must not be let to immediate family members
- 1 to 5 year company lets acceptable, longer lets acceptable subject to no more than 5 years remaining on the letting agreement
- Maximum of 4 storeys on ex-local authority developments
- Total block of flats accepted provided the landlord owns the freehold. Unit restriction in block, 8 maximum in unit
- No freehold flats/maisonettes
- No pre-fabricated properties, MOD, Housing Association houses or flats