# buy to let mortgages



## scaryrob (Dec 1, 2009)

hi, can anyone give me any advice on but to let mortgages. was thinking about buying a flat to let out.


----------



## mba (Jun 17, 2006)

You need at least 20% deposit iirc


----------



## carrera2s (Jun 28, 2009)

Yes not a good time mate for any morgage at the moment!
I have property i rent and mine existing morgages have recently dropped from the fixed for two years 5.59 % to ther tracker at 2.29% so a good time at the moment!
I have looked at buying more but deposits required at the moment are silly with anything from 20/30%.


----------



## Spuffington (Jan 26, 2009)

You need at least 25% deposit, if not more, these days.

You will also need to demonstrate the fact that you can cover at least the mortgage interest portion by a factor of up to (potentially) 2 times - that's in addition to your usual monthly commitments (i.e. your own mortgage and bills).

The reason for these demands is it is much easier (conceptually at least) for someone to walk away from a property they don't live in, whereas most people would move heaven and earth to make sure they could pay the mortgage for the house they live in.

Buy to Let and property generally is not the panacea lots of people thought prior to the credit crunch in terms of a sure-fire bet at increasing your capital return. Think long and hard as to whether you can afford to pay the mortgage if you have a long void period (i.e. without a tenant), what the local market is like - whether it is cheaper for people to buy than rent etc. And also whether you are likely to experience any worthwhile asset appreciation over the expected life of your asset hold.


----------



## scaryrob (Dec 1, 2009)

guys thanks for all your replies. what about buying a buy to let at the moment on an interest only, ride out the storm and hope property prices rise?


----------



## Spuffington (Jan 26, 2009)

Not sure if you'll be able to.

Plus -what's the point? If prices remain stable-ish over the next 5 years, which is looking increasingly likely, you won't end up owning anything and will gain nothing when you flip it.

The clever way to do this would be to pay it down as quickly as possible - use the equity and some spare capacity in the income in it to secure against a new loan on a new property and keep doing it to build a sustainable, lower-geared property portfolio.

High leverage is exactly what got the world in this mess. Banks are not keen on repeating it and neither should we be.


----------



## scaryrob (Dec 1, 2009)

Spuffington said:


> Not sure if you'll be able to.
> 
> Plus -what's the point? If prices remain stable-ish over the next 5 years, which is looking increasingly likely, you won't end up owning anything and will gain nothing when you flip it.
> 
> ...


hey thanks for the advice. maybe think long and hard about it. but do you still think its a wise investment as a extra pension when the time comes?


----------



## nethers66 (Jul 23, 2008)

We have done a bit of research on BTL mortgages, and Birmingham Midshires seem to be offering some of the best deals at the moment.

They have 2yr fixed rates, 1 & 2 yr trackers etc.

Worth a look just to get some figures :thumb:


----------



## mba (Jun 17, 2006)

scaryrob said:


> hey thanks for the advice. maybe think long and hard about it. but do you still think its a wise investment as a extra pension when the time comes?


Its exactly like i am doing :thumb:

Do agree with Spuffington though get as much of it paid of as possible and use the capital to buy/invest in you next property :thumb:


----------



## lofty (Jun 19, 2007)

nethers66 said:


> We have done a bit of research on BTL mortgages, and Birmingham Midshires seem to be offering some of the best deals at the moment.
> 
> They have 2yr fixed rates, 1 & 2 yr trackers etc.
> 
> Worth a look just to get some figures :thumb:


I've got a couple of BTL mortgages with Birmingham Midshires or BM solutions as they are also called,they offered the best value when I got mine a couple of years ago,only needed 20% deposit then but I think this has increased to 25% now.Because the rates are higher it can be tricky to get the figures to work.A rough idea below

Property price £125,000
Deposit £ 31,250
Balance to Mortgage £ 93,750

Cost of interest only Mortgage approx £400 per month
Rental income per month needed (125%) £500 per month

As a long term investment (pension) I dont think you can go wrong with property,but like all investments buying and selling at the right time is key.


----------



## peanut1 (Dec 29, 2009)

Totally disagree with above, now is a superb time to buy. Prices are sensible, if you have a decent enough deposit, i.e.25% then you will get a good rate and it will be covered by the rent. its all in the research. Dont know where your from but in Ashford, Kent, I am dealing with quite a number of investors buying low to middle end stock.


----------

