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?
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.