Why use a buy to let mortgage
Using a mortgage to purchase a property for rent
If you want to purchase a property for rent and require a mortgage you will need a special kind of mortgage called a
buy to let mortgage.
These mortgages differ in one particualr area, and that is affordability. The lender will assess affordability
based on the loan to value (the amount of deposit put towards the purchase) the the likely rent achievable, or
rental yield. If the lender decides the rental yield would not be enough to maintain the mortgage repayments many
would decline to offer a mortgage regardless of the financial status of the applicants.
Typical deposites required by lenders range from 15% to 25% of the purchase price. The required rental yield varies from
lender to lender.