Buy to let mortgage deals you need to see!

Landlord Expert
By Landlord Expert May 19, 2015 08:46

If you want to rent out a property as a landlord, you need a buy-to-let mortgage

Typically landlords need higher deposits than normal buyers and will pay higher mortgage rates too. Affordability is calculated not on the borrower’s income, but how much rental income the property can achieve. This is known as rental cover.

Like mainstream mortgages, buy-to-let mortgages can be fixed mortgages of various lengths, or variable rate mortgages.

Two-year fixed rate mortgages are the cheapest, but some tracker mortgages give them a run for their money.

If you want the added security of a five-year fixed rate, you’ll pay a premium in the form of a higher interest rate. Long-term fixed rates also come with much higher Early Repayment Charges, so you might need to take that into account too.

Top two-year fixed rate buy-to-let mortgages

First, let’s look at the two-year fixed rate mortgages. These are the lowest rates around but you’ll pay the price for a cheap rate in the form of a big fee.

Most buy-to-let mortgages have a fee that’s a percentage of the mortgage amount so the tables below show the fee for a mortgage of £150,000.

You’ll need at least a 15% deposit to get a buy-to-let mortgage.

Lender LTV Interest rate Mortgage fee
NatWest 60% 2.25% £2,266
Virgin Money 70% 2.63% £2,369
Mortgage Trust 80% 3.95% £2,945
Kent Reliance 85% 4.99% £3,355

As you can see, there are some massive fees there. But what if you don’t want to stump up a significant product fee? These are the best mortgages with fees under £700, again looking at a £150,000 mortgage.

Lender LTV Interest rate Fee
Woolwich 60% 3.65% £240
Godiva Mortgages 65% 3.69% £250
Skipton Building Society 70% 3.45% £286
Mortgage Trust 80% 4.45% £695

Five-year fixed rate buy-to-let mortgages

If you want to go for a longer-term fixed rate deal, then you may prefer a five-year fixed rate deal. While you enjoy that security for longer, you may have to pay a premium in terms of a higher rate. You also have significant Early Repayment Charges to consider should you wish to leave the deal early.

Again the fees are calculated on a mortgage amount of £150,000.

Lender LTV Interest rate Fee
Santander for Intermediaries 60% 3.29% £4,115
Platform 65% 3.89% £1,318
Virgin Money 70% 3.79% £1,369
Mortgage Trust 80% 4.45% £2,945

And now let’s take a look at the best deals with a fee of under £700.

Lender LTV Interest rate Fee
NatWest 60% 4.05% £271
Platform 65% 4.29% £319
Skipton Building Society 70% 4.29% £286
Mortgage Trust 80% 4.95% £695

Tracker buy-to-let mortgages

With a tracker mortgage your monthly repayments may go up or down, usually depending on what’s happening with the Bank of England Base Rate. However some lenders track other rates – often their own “base rate” or another variable rate such as LIBOR.

At the moment, there are some really great rates on offer. However don’t be too swayed by the rate you see now – could you still afford the mortgage if interest rates rose by a couple of percentage points?

Most trackers are for two years but there a handful of products available for the entire term of the mortgage.

Two-year trackers

Lender LTV Rate Fee
NatWest 60% 1.95% (NBBR+1.45%) £2,266
Platform 65% 2.44% (BBR+1.94%) £2,318
Virgin Money 70% 2.29% (BoE +1.79%) £4,124
Mortgage Trust 80% 3.65% (LIBOR+3.05%) £2,945

Term Trackers

The best deals are listed below and are all at the lender’s standard variable rate (SVR) – be aware it can alter this at any time.

Lender LTV Rate Fee
Godiva 65% 2.89% SVR for term £2,249
Aldermore 70% 3.93% SVR for term £4,930
Aldermore 80% 4.98% SVR for term £2,429

Again, some of the fees on these deals are huge so here are some low-fee trackers.

Lender LTV Interest rate Fee
NatWest 60% 3.14% (NBBR+2.64% for 2 years) £271
Leeds Building Society 70% 5.99% (SVR for term) £405
NatWest 75% 3.79% (NBBR+3.29% for 2 years) £271
Ecology Building Society 80% 5.75% (SVR for term) £600


Landlord Expert
By Landlord Expert May 19, 2015 08:46

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