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Mortgage Advisor & Director
What is an interest-only buy to let mortgage?
An interest-only buy to let mortgage is a mortgage for a buy to let property that is on an interest-only repayment basis, with none of the monthly payments going towards paying off the capital loan.
Most buy to let mortgages are on an interest-only basis, meaning that the mortgage balance remains the same. This keeps the monthly payments low because the mortgage capital is not being paid off.
When the time comes to pay off the balance, most landlords raise capital by either selling the property or by using proceeds of another property sale.
Can I get an interest-only buy to let mortgage?
The eligibility criteria will vary from lender to lender; however, there are a few common factors to consider:
- Generally, you will need to be at least 21 years old to apply for a buy to let mortgage, and in some cases, 25 years old.
- For portfolio landlords, they may find there is a limit to the number of properties that can be under a standard buy to let mortgage. Portfolio mortgage lenders will provide more options.
- First-time buyers may struggle to find an interest-only buy to let mortgage lender.
How do interest-only buy to let mortgages work?
Throughout the mortgage term, you will pay off the interest on a monthly basis, meaning that you will need to have a plan for when the term ends
When the mortgage term ends, the full mortgage balance is due for repayment.
Many landlords repay the loan by selling the property or another property in their portfolio. Alternatively, it may be that you are able to refinance the property onto another mortgage type at the end of the term. Subject to early repayment fines, it is also possible to make capital repayments on a regular or ad hoc basis throughout the term.
Interest-only buy to let mortgage rates
Many factors influence the rates you will be offered on your interest only buy to let mortgage.
While these will vary between lenders, factors such as Loan to Value (LTV) ratio, credit history, length of term will all have an impact on the rates you achieve.
As a whole of market broker, at Teito we work with specialist lenders including those who deal with interest-only buy to let mortgages day to day. Our advisors have helped many people like you to get the best rates possible on their buy to let mortgage, sign up today and put our team to the test!
How can I get an interest-only buy to let mortgage?
Our team of advisors work with hundreds of lenders to find you the perfect mortgage. Get started now, and we promise to make getting your interest only buy to let mortgage as straightforward and stress-free as possible!
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Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
