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    • Million pound mortgages reach five year high
    The number of homes sold at ?1 million and above has tripled over the last five years. ?1 million pound plus mortgages in England and Wales have increased from 2,249 in June 2002 to 6,170 in June of this year, with London accounting for the highest proportion of sales at 58%. Halifax ...

    HSBC reduces fee-free lifetime tracker mortgage rate
    Those seeking a lifetime tracker mortgage should look to the HSBC as it has lowered the interest rate on its fee-free mortgage from 6.45% to 6.44%. Available at up to 90% loan to value, the lifetime tracker follows the Bank of England's base rate at 0.69% above. The new mortgage has been ...

    Mortgage holders seek DIY improvements
    The growing fascination with DIY looks set to grow as ever increasing numbers of mortgage holders make improvements to make their homes more valuable. Halifax figures show that nearly 25% of homeowners who carried out DIY in the last year do so in the hope that it would help increase the ...

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    • Buy to Let Mortgage


    A Buy To Let Mortgage is a loan that enables you to buy a property with the specific intention of renting it out. With the rent you receive from the tenants, you will be able to pay off the mortgage on the property

    Use our short mortgage enquiry form to speak with an FSA regulated advisor who can offer guidance and advice on Buy To Let mortgages.

    Some things that as a buyer that you should be aware of with Buy to Let mortgages are:

    • The lending criteria can be more restrictive with Buy to Let than with residential mortgages

    • Buy to Lets are not generally available for more then 85% of the purchase price (loan to value)

    • More often than not, you will be expect to have at least 20% of the purchase price as a deposit

    • The rental income on the property you wish to purchase, usually has to exceed 1.3 times the interest in order to be taken into account.

    Some of the leading lenders use other criteria, but these tend to the “standard”.

    House prices according to long term trends are always on the rise and therefore if the short term market conditions allow e.g regarding interest rates, then purchasing a property with the intention of renting it out can be a smart business move. Not only can you gain rent (that should hopefully cover the mortgage payments) but also the long term rises in property prices means you have a long term asset that appreciates in value.

    The size of the mortgage will depend on your projected rental income and ability to borrow, however in general the criteria are stricter than with your first purchase. As an example some mortgage lending companies expect rent to be 30% higher than the mortgage payments you are paying on the property. Also the maximum mortgage loan available is usually 80% of the property value, compared with 90-100% with a first time mortgage. A typical deposit will be around 20%.

    Despite the predictions of long term house price inflation above it is wise to remember that house prices can fall as well as rise and a fall in house prices, major repairs, rising interest rates or long periods with the property vacant, can all reduce your property rental profit and make your monthly mortgage payments harder to meet. Always make sure you are not mortgaging yourself up to the hilt and make sure you have a contingency in place to cover for such negative market conditions.

    Another issue to remember is that buy to let mortgages are not regulated by the FSA (Financial Services Authority) if less than 40% of the purchased property is used by the borrowers or their immediate family. The result of this is that if you have any complaints you will not be able to complain to the FSA to seek redress from the Financial Services Compensation Scheme.

    Latest News on self certification mortgages:

    One of the biggest growth areas in the mortgage market over recent years has been that of the buy-to-let mortgage.

    Buy-to-let mortgages share of the mortgage market has risen from 3% to 10% in the last five years, and almost 1 in every 6 mortgages taken out so far this year have been buy-to-let.

    One of the factors fuelling the increased demand for buy-to-let mortgages is that with the uncertainty surrounding the already volatile housing market, the rental market is experiencing a boom. This is especially the case in university towns, with buy-to-lets aimed at the student rental market making on average over 1% more than any other buy-to-let market. In Durham for example, the average return on investment for buy-to-let landlords is 9.12%.

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