Recent years have seen low interest rates which have made buy to let mortgages much more attractive, especially when compared to other types of investments. Strong rental markets, particularly in university towns and cities, and low interest rates have resulted in an increase in the number of investors wanting to add property ownership to their portfolio. Buy to Let mortgages are a great way to diversify investment or supplement pension income with regular rental contributions.
A buy to let mortgage, which can also be called an investment mortgage, differs from a standard residential mortgage because a lender will take into consideration the rent you will earn from the property as the primary source of income for affordability purposes.
When considering a buy to let mortgage application, a lender will typically look for a prospective rental income of 125% of the monthly interest payment of the loan, but may also require the landlord to have a minimum personal income of typically £25,000.