An investment mortgage is specifically designed for purchasing properties intended not for personal residence but for generating rental income or capital gain through future resale. Unlike residential mortgages, these are assessed based on potential rental earnings as well as the borrower’s own financial health. Typically, investment mortgages come with higher interest rates and require a larger deposit—often 25% or more of the property’s value—reflecting the greater risk they pose to lenders.
Borrowers must carefully consider market conditions and tenant demand, as these factors critically influence the investment’s success.
Navigating the mortgage landscape can be daunting, especially when dealing with specialised options. Each of these mortgages comes with its own set of challenges and regulatory requirements.
A Buy to Let mortgage is specifically needed if you are planning on renting the property out to a tenant. But be careful, not all Buy to Lets are the same. If you are renting to a family member, you need a Consumer Buy to Let, or if you are planning on moving into a new property and renting out your old one, its a Let to Buy. Typically, affordability for Buy to Lets is based on your rental income (which would need to be between 125% -140% of your mortgage cost depending on your situation) unless a Consumer Buy to Let which is based on your own affordability.
A HMO Mortgage is similar to a Buy to Let, but applies to properties that are classed as having seperate living units (i.e more than one tenant, shared facilities etc). HMO mortgages are not offered by every lender, so its absolutely key to understand which lenders we can approach, and who is most likely to accept your application. HMO’s have a seperate set of additional requirements, and our advisers will guide you through the process.
Holiday Lets, in particular Air BNB properties are becoming more commonplace in the property landscape. Again, only certain lenders are happy with this kind of arrangement due to the risk involved on the income side (its not as safe as a standard tenant, as depends on the demand for the property rather than being secured for periods of 6 months or longer with a traditional Buy to Let product.
Development finance is a type of loan specifically for funding real estate projects from the ground up. It’s what you need if you’re looking to build something new or substantially renovate an existing property. This could be anything from constructing a block of apartments to transforming an old warehouse into trendy office spaces.
When you have a few properties in your control, many lenders will class you as a Portfolio Landlord. This opens up products that will allow the borrowing to be across the whole estate, rather than individual properties. This can be a great way of raising capital based on the total equity you own, rather than being limited to the equity in a specific property.
To see the kind of monthly costs, and products available on our live lender tracker, please enter the mortgage requirements in our system below. This will give you an idea of monthly payments for your mortgage.
Our experienced advisers are here to help you overcome these challenges. We provide tailored advice based on a deep understanding of these unique markets, combined with strategic insight that aligns with your financial goals.
Whether you’re expanding your property portfolio, delving into the holiday rental market, or financing a development project, our team ensures you have the expert guidance necessary to navigate these complex areas effectively. With our support, you’ll be equipped to make informed decisions, manage risks appropriately, and achieve your investment objectives smoothly.
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