TO LET MORTGAGES
TO LET MORTGAGES
We have partnered with leading lenders so that you can research UK buy-to-let mortgages that are tailored to your specific needs.
Buy to let continues to be a popular form of investment. We’ve joined forces with one of the UK's leading buy-to-let and commercial mortgage brokers, Commercial Trust Ltd.
Whether you are buying your first buy-to-let property or you are a portfolio investor, you can benefit from expert advice on financial matters.
- What interest rates and products are available?
- What is the maximum available loan?
- What are the full costs and monthly repayments?
- What are the features of the loan and why is it most appropriate for me?
- How can I complete my application to have the best chance of acceptance?
Commercial Trust only recommends buy-to-let mortgages that are affordable, competitive and suitable for their clients.
Your advisor will help you search for the most suitable mortgage type. Compare fixed rates, variable rates and flexible mortgages, interest-only and repayment loans, and specialist products for houses in multiple occupation (HMOs), limited companies and expatriates.
Why use Commercial Trust?
The main benefits for appointing Commercial Trust as your specialist broker are as follows:
- Commercial Trust are rated 9.1 out of 10 on Trustpilot.co.uk by current clients.
- They have access to more than 500 buy-to-let mortgage products.
- You could borrow up to 85% of the property value.
- You will get access to latest products from lenders, including those with no maximum age criteria.
- Specialist self-employed mortgages are available.
- Mortgages are available for first-time landlords and non-homeowners.
- You could get a decision in principle from a lender within two hours.
- Fast turnaround rates mean that the money could be in your account within three weeks.
- Loans are available for limited companies and special purpose vehicles (SPVs), British expats and HMO/multi-unit landlords.
For their specialist tailored service, Commercial Trust charge a broker fee of up to £1,198 for first buy-to-let mortgages, up to £2,198 for secured buy-to-let loans and 1% of loan value (minimum £1,999) for their bridging loan and commercial mortgage services.
Click here to to get your buy-to-let mortgage questions answered!
Fixed-rate mortgages allow you to fix your interest payments at a set level for a set period of time. Choosing a fixed-rate buy-to-let mortgage will allow you to plan your finances knowing exactly what your finance costs will be for the initial term.
The initial period normally extends up to 24 months, though for clients who want to fix their payments for longer, terms of 2,3,5 and 10 years are available. After the fixed period expires the lender applies a reversion rate. The reversion rate is usually a variable rate, which means it can rise or fall.
Be sure that you understand the reversion rate and how it will affect your repayments. Factoring in the reversion rate, or the cost of switching mortgage before the reversion rate applies, is vital to making profitable use of a fixed-rate mortgage. Consider planning a remortgage ahead of time, or ensuring you have the right level of rental cover to continue to deliver a profit.
Headline variable rates are often discounts on the standard variable rates lenders charge. Hence, they are sometimes referred to as ‘discount’ or ‘discounted variable’ rates.
Variable rates can change at any time, including during the initial period, which makes them less predictable and ‘safe’ than fixed-rate mortgages. Because of the increased risk, the initial rates tend to be lower and/or the fees cheaper than the fixed equivalent.
Like variable rates, tracker rates can change at any time. But unlike variable rates, they are tied to an external rate. Usually, this will be the Official Bank Rate of the Bank of England or the London Interbank Offered Rate (LIBOR).
Being tied to an external rate, tracker rates have the potential to be less volatile than variable rates. They are priced according to a fixed margin between them and the rate they track, but unlike fixed rates, are not guaranteed to go no higher. They might be a good middle ground for borrowers who want to benefit should interest rates fall, but who want a little more certainty than a variable rate might offer.
With an interest-only mortgage, you repay only the interest accrued on the debt each month. The capital value of the loan remains the same
Interest-only mortgage products allow you to make lower monthly payments and increase your cash flow. But you will need to make provisions to ensure that the full amount borrowed is repaid at the end of the mortgage term.
Interest-only mortgages give you more income each month that it not tied up in equity. You can use this to maintain the property, invest in improvements, or spread around your portfolio as you see fit. Thus, interest-only mortgages can give you more flexibility.
You will need an exit strategy to pay off the full amount borrowed when the loan ends. If you wish to retain rather than sell the property, you will need to find an alternate source of funds.
This type of mortgage means you are paying off both the interest charged on the loan and some of the capital sum borrowed also.
A repayment mortgage means that by the end of the mortgage term you will have paid off both the interest and the full capital amount so that you will own the property outright.
Many lenders levy early repayment charges (ERCs) if you repay some or all of your mortgage loan before the agreed date. ERCs can be high and can have a serious impact on your return on investment.
One way around this is a loan with a facility for unlimited overpayments. This allows you to reduce your capital debt and work towards the full repayment of the loan at the end of the term.
Limited company mortgages
With changes to mortgage interest tax relief for buy-to-let property owners, buying invest property through a limited company structure has become more attractive.
The major reason for this is that limited companies are exempt from the restriction of tax relief on buy-to-let mortgage interest. This is because they pay corporation tax rather than income tax. For some clients, this distinction may afford other tax benefits.
A company structure allows shareholders to withdraw dividends. As of April 2016, there is a £5,000 tax-free allowance available on individual dividends.
There are financial impacts to consider when using a limited company structure for buy to let:
- There are additional costs, such as preparing end-of-year accounts and tax returns.
- Transferring a property to a limited company will count as a transaction, giving rise to capital gains tax (CGT) and stamp duty liabilities.
Incorporating a property business is a complex decision and requires expert financial and tax advice.
This is a growing are of the buy-to-let market. At Commercial Trust, there is a team of expert advisors who can help to find specialist products for limited company clients.
Houses of multiple occupation, or HMOs, are properties that are subdivided into smaller units. The whole property may be let on one ’joint and severally liable’, or each unit can be let on individual agreements.
HMOs have the potential to deliver higher returns than single-let dwellings. As a result, they can be popular with experienced property investors.
However HMO management can require a greater depth of knowledge. There are additional rules and requirements you need to meet. And if your HMO is higher than two stories and houses more than five tenants that are part of two or more distinct households, you will need to apply for an HMO licence from your local authority. Some authorities will also apply licensing to smaller properties.
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We've teamed up with Commercial Trust Ltd so you can make a buy-to-let mortgage enquiry or have your questions answered quickly and with no obligation