The Buy to Let (BTL) mortgage market can be confusing, even for an experienced landlord. There have been many regulatory and tax changes for landlords to take into account when looking to buy or remortgage an investment property.
WHAT IS A BUY-TO-LET MORTGAGE?
A buy-to-let or buy to rent mortgage is a type of mortgage specifically for properties that are owned or purchased with the intention of renting them out.
They’re often set up on an interest-only basis, which means you only make monthly interest payments each month. The outstanding loan balance – i.e. the amount you borrow – doesn’t reduce and is paid back at the end of the mortgage term via a suitable repayment vehicle, usually the sale of the property.
If you rent out a property on which you only have a residential mortgage, you’ll be in breach of your mortgage agreement which could put your property at risk of repossession. To rent out your property without breaching your mortgage agreement you’d have to either obtain consent to let from your existing lender or switch to a buy-to-let product.
The Financial Conduct Authority does not regulate the following: Some forms of Buy to Lets, Commercial Finance, Secured or Unsecured Loans, Overseas Mortgages, Wills and Trusts.