Finding a buy-to-let mortgage

Landlord Centre provides a free online mortgage finder enabling you to compare buy-to-let mortgages  from the whole of the market. It does not charge a broker fee and could save you considerable time and money.

Selecting a product

There is a wide range of buy-to-let mortgages lender and products available and several different ways to go about finding a mortgage to suit your own specific circumstances. The main choices are either to go directly to a buy-to-let lender or your current bank; employ a mortgage broker to source a product for you; or use the internet and other resources to research the buy-to-let mortgage market yourself.

Going directly to a buy-to-let lender or your current bank may reduce the number of  products available to choose from, and some of the larger buy-to-let lenders only deal through mortgage brokers; using a professional mortgage broker should ensure that you get a competitive rate from a broader range of products, although you may be charged an additional upfront broker fee for the service; if you are confident about choosing a suitable mortgage yourself, there are tools available on the internet which enable you to research the buy-let-mortgage market and apply for a mortgage online.

Lending criteria

Searching for and selecting an appropriate buy-to-let mortgage involves checking that your application fits the lender’s specific criteria, and each lender has different requirements.

Some of the more common aspects considered by buy-to-let lenders are listed below:

• maximum loan to value (loan expressed as a percentage of the property valuation/purchase price)
• rental income – it is normally necessary to demonstrate that the expected rent for the property exceeds the monthly mortgage payment
• maximum and minimum loan size
• location of property
• type and construction of property (flat, house)
• size of property (bedrooms, floors)
• houses in multiple occupation (HMOs)
• student lets
• minimum and maximum age of applicant
• employment status of applicant (employed, self employed)
• first time buyers
• limited companies
• ex-pats and foreign nationals

It is important to make sure that you meet the lender’s criteria before applying for a mortgage.

Comparing mortgages

There are hundreds of buy-to-let mortgage rates  available to choose from, designed for various purposes and aimed at different customers’ needs. There are a number of key factors to look at when comparing different rates to find the products that are most cost effective, including:

• initial interest rate and term
• fixed or variable rate
• reversionary rate
• monthly mortgage payment
• arrangement fee
• booking fee
• early repayment charges
• Student lets

Each of these factors can affect the total cost of the mortgage over a given period of time.