75% mortgages offer more choice and cheap rates
If you have a deposit of 25% or more then you have the option to view and compare the range of 75% loan-to-value mortgage on the market. Within this category there is more choice and the rates and fees applied are much cheaper and more attractive when compare against the 80% and 85% products. There is so much choice now in the market that the internet and online search is important to keep afloat of the current deals and they happen and change.
Comparison tools are useful
I use lendingexpert.co.uk for my mortgage needs as they have a pretty comprehsive mortgage search facility that’s easy to use. You can access it here, and for search specifically for 75% deals go here. It’s important that you consider not only the interest rates, but also the arrangement fees that the lender is applying and also any get out fees if you were to move or pay off your mortgage early, or before the fixed term period.
Arrangement fees for high LTV products
Arrangement fees for high loan to value mortgages can be quite expensive and are evening more if you were looking at the 80-85% range of mortgages on offer. Again using a good online comparison tool will be able to display all the fees and rates associated with each product and mortgage lender.
What’s the gearing and LTV ratio?
What’s your portfolio gearing level?
Is it also important for long term investing to keep your loan to value ratio at a conservative level, too higher gearing can in the future get you into trouble if house prices were to fall or take a dip.
Gearing is the ratio between equity and debt.
There is an interesting article on leaverage (also known as gearing) on the subject here. In the credit crunch many landlords and investors got burnt when their investments went into negative equity, and many still haven’t recovered years later.
What’s the best option for me?
Every personal and investor requires and uses a different Buy-to-let buying and finance stratagey to meet their long term investment goals. If you would like help with this then I can spend with you to help you understand the options and mortgages that are available to you.
80% mortgages offer more choice and cheap rates
The 80% mortgage range is the second most popular mortgage product behind the 85% range for first time landlords and new investors as it allows you to purchase an investment property with a 20% deposit. Unlike the 85% range their are more lenders offering loans within this category and more choice to choose from.
You’ll also find that the rates charged are cheaper and the arrangement and set up fees are smaller too. The more of the deposit you have the better and cheaper deal you’ll get!
As with any type of mortgage you should factor in the cost of stamp duty, letting agency fees, and any costs associated with getting the property to a rentable standard. Letting agency fees are in the region of 5-6%.
What lenders are available?
As more and more lenders come to the market with new products almost weekly it is diffilcult to for small brokers like myself to keep track of the mortgage rates and changes as they happen. There are a range of online resources that offer online comparison and allow you to track and compare lenders and mortgages side-by-side. The comparison search at lending expert allows you to see all the current 80% mortgage deals and allows you to vary the loan to value to meet your needs too.
Get a quote and advice
If you need a mortgage or simply wish to get some friendly advice then please do get in touch.
85% is popular for first time landlords
The 85% range of buy to let mortgage products has deminised in recent years and is now slowly starting to make a come back. If you would like a detailed view of the all the buy to let mortgage options then click here to access the comparsion service by The Lending Expert.
An expanding range of lenders
More Buy-to-let mortgage lenders are expanding their range and willing to lend on 85% loan to value (LTV). This means that as an investor you can buy your property for a small deposit of just 15%. While these types of mortgages are more expensive in terms of rates charged and arrangements they are very popular with first time landlords and property investors.
What are your 85% Buy to let Mortgages options?
What are your finance options?
These types of mortgages are poplular with new investors, however they are expensive when compared against 80% and 75% mortgages. The arrangement fees are often quite high and so are the ongoing rates of interest. However, they do provide a lifeline for new investors who are keen to get going and can only raise the minimum amount required. If you are purchasing a property at below market value or a property that you are able to add value to then there is always the option to remortgage to a new 80 – 70% deal later on.
Caution for new buy to let investors
New investors should be cautious when buying a BTL property for the first time to ensure that the investment stacks up and there will be a return not only to pay the mortgage, but also provide additonal funds to carry out maintenance work that may be required throughout the lifetime of the investment.
Often new property investors will rush in with excitement to buy, without fully considering and understanding the risks and costs with owning a buy to let property. Being a landlord and owning buy to let property can be expensive if mistakes are made or you buy the wrong type of property in an area with low tenant demand.
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What products are there?
There are only a handful of lenders offering buy to let 85% mortgages that you could probably count on one hand. However the market is constantly changing and we’d recommend using a good comparison site to keep upto date with the constant change in the market place.