Buy to Let Mortgages
If you have been thinking of investing in property and becoming a landlord, then you are not alone. Buy to let is a popular form of investment for clients with some spare cash. With mortgage rates low, rental yield increasing and continuing to rise, this is being considered by clients as a potentially safer and more lucrative investment compared to other traditional forms of investment. However iowevern 2017 new rules have tightened up criteria in this market. No sooner had landlords come to terms with the stamp duty increase and the stepped reduction in tax relief they now have to take on board the greater regulation. These changes now require lenders to consider the likely future interest rates over a 5 year period. Specifically lenders have to:-
- Stress test their lending against a rate increase of at least 2%.
- Assume a minimum rate of 5.5% even if stress test rate of 2% increase would actually produce a lower rate.
In addition underwriting rules are even more complex for portfolio landlords where you have more than 4 properties on Buy to Let mortgages.
As we operate in this environment day in, day out we know how to make the process simple, identify the best types of approach for you and highlight key elements of your portfolio that need to be monitored. It’s essential that you now speak with an experience mortgage broker when looking at your buy to let needs for either a future mortgage or potential remortgage.
The Financial Conduct Authority does not regulate some aspects of buy to let mortgages.
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