Are Buy-to-Let Mortgages Interest Only?
Interest only mortgages means that you only pay interest each month, and then pay the value of the loan at the end of your mortgage term, or when you sell your property. If you do not wish to sell your property at the end of your mortgage term, and you do not have enough savings to pay back the capital, you can seek a remortgage.
So are buy-to-let mortgages interest only?
Buy-to-let mortgages are often interest only. One catch is that interest rates tend to be higher than for a residential mortgage. But, if you seek the assistance of a mortgage advisor, they will be able to calculate whether you are eligible and weigh-up how much you could reasonably expect to afford. They can also perform stress tests to give you and potential lenders peace of mind that, if your income on the property is paused for a time, you will still be able to afford your interest payments.
A buy-to-let mortgage also typically comes with a larger deposit.
How much interest will I need to pay?
Reading that interest rates tend to be higher for buy-to-let mortgages than residential ones, you probably want to know exactly how much you’d be expected to pay. There is not a one-size-fits-all answer to this as it depends on a number of factors, including how much you borrow, your financial situation, your expected rental income, and the type of mortgage you take out.
We realise this may not be the answer you’re looking for, but with the amount of interest payable often being swayed by factors unique to each individual, by far the best way to know how much interest you’d be likely to pay on a buy-to-let mortgage is to speak to a mortgage broker.
Speak to a professional mortgage advisor today
If you’re searching for a friendly Remortgage Broker Northampton, Derngate Wealth Management are on hand to help. Contact us today to book your free initial consultation and discuss your buy-to-let mortgage options. As ‘Whole of Market’ brokers, we can find the right rate for you.