This means you will have the option to fund a lower deposit or equity to convert your existing main residence to a buy to let or purchase a buy to let. The effect of the lower deposit or equity required is an increase in the interest rate charged due to the higher risk to the lender.
The choice of lenders who will offer buy to lets mortgages with just a 20% deposit is increasing.
On my last buy to let blog on 85% lending there was just one lender. With just a 5% increase in deposit or equity the lenders increase to 10.
Aldermore, Bath Investment, Clydesdale, Investec, Kensington, Kent Reliance, Leeds, Precise, The Mortgage Works and Yorkshire Bank.
Each lender has its own criteria but as in all cases the three areas to look out for are
- Initial promotional rate.
- The lenders standard variable rate after initial product expires.
- An example of this is Aldermore 4.98% – 5.20% APR / Kent Reliance 6.58% – 6.60% APR
- Lenders arrangement fees.
Some other quirks are whether you can use your own solicitor or the lenders nominated solicitor at a far higher cost. Precise are guilty in this area. Not all lenders let you switch your existing mortgage from residential to buy to let to enable you retain your existing property and buy a new residential home. Some lenders are only available to experienced landlords.
Why Use Neil Soundy Financial Services For Your Mortgage Advice?
- We are experts in SPV / Ltd Co lending.
- Your initial consultation is free with no obligation
How Much Will It Cost Me For Your Advice?
A fee of £495 is payable on completion of the mortgage and Neil Soundy Financial Services Ltd will keep the commission received from the lender for arranging the mortgage.
Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.
The Financial Conduct Authority does not regulate some forms of buy-to-lets.
We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.
Think carefully before securing other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on your mortgage.