How to get Better Buy to Let Mortgage Deals

As a landlord, or a potential landlord, you’ve probably spent a great deal of time looking for the best buy to let mortgage deals available. Unfortunately there are never that many great deals around at any one time. The key therefore is to make the buy to let mortgage deals that are available suit your needs as well as you can.

Securing a lower interest rate

There are several methods you can use to get a buy to let mortgage deal with a lower than standard interest rate. The first is to offer a larger deposit than the mortgage provider initially asks for. The current economic climate has somewhat forced buy to let mortgage providers to reduce the minimum deposit required, most dropping the figure from 40% to 20% or 25%. Strangely though, if you can still manage to put a 40% deposit on a buy to let property the big mortgage providers are much more willing to reduce the interest rate accordingly. 

A second option involves you opting to pay an increased arrangement fee for the mortgage. The average arrangement fee is around 2% of the property purchase price but if you agree to pay 3% or even 3.5% some mortgage lenders are willing to drop the standard interest rate you pay on the loan. Of course, for this option to be classed in the category of ‘buy to let mortgage deals’ you will need to check that the money you save from the lower interest rate outweighs the additional money you pay in arrangement fees. Calculations will be required!

Finally a third option, and one that is growing in popularity, is to use your personal income as well as the projected rental income to secure the buy to let mortgage. Very few buy to let mortgage providers ask for details of your personal income, simply because they base the size of the mortgage you qualify for on the projected income from renting the property out. If you are willing to add your annual personal income to the figure used to assess the application you are much more likely to be offered attractive buy to let mortgage deals.

Is it worth it?

If you can afford to put a 40% deposit on a rental property, or you can afford to pay a bit extra in arrangement fees then these methods can earn you great buy to let mortgage deals. You do need to do a few sums though, just to make sure you save more in interest payments than you spend securing the deal.