ASN Mortgage Solutions Ltd

WHAT IS IT?

Business buy-to-let (BTL) mortgages are for landlords who buy property specifically to rent out. They are usually more expensive than residential mortgages, but they could help you become a property investor. Buy-to-let mortgages are only suitable for people who want to invest in houses and flats. Investing in property is risky, so you shouldn’t take out a BTL mortgage if you can’t afford to take that risk. They are in many ways just like residential mortgages, but with some key differences: • Interest rates on buy-to-let mortgages tend to be higher • The minimum deposit for a buy-to-let mortgage is usually a quarter (25%) of the property’s value (some lenders offer deals with a 20% deposit, others want a 40% deposit) • The fees tend to be much higher • The level of borrowing is typically based on the level of rental income • A 3% stamp duty surcharge applies, which applies to the entire purchase price of the property Most BTL mortgages are interest-only, which means you don’t pay anything off the lump sum borrowed each month but, of course, at the end of the mortgage term you need to repay the capital owing in full.

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