Buy to Let Mortgages

Planning for when no rent is coming in

When you plan to apply for a Buy to Let Mortgage, it’s important to consider how you’ll maintain the mortgage payments throughout periods of property vacancy. Whilst they can provide a stable income, all rental properties are vacant at times, for example, during renovation or whilst you are waiting to find tenants.

High end rental protection policies are a sensible way to cover repayments on your mortgage when your rental income is lacking. Most will cover property vacancies which result from a wide variety of circumstances.

Ensure you have the final lump sum covered

Although it’s quite standard practice for landlords to pay off the final lump sum at the end of their mortgage by selling their rental property. Whilst this can be a reasonable repayment option, there are many situations where it won’t be viable.

It’s important, therefore, to have a backup plan in place. There are a variety of reasons that selling your rental property might not be an option, from a lower than anticipated sale price, to a slow market, meaning you don’t sell it in time to repay the loan.

The tax implications of owning a Buy to Let Property

There are a number of tax implication to consider before you decide to become a landlord, such as:

• If you own more than one property, there is an extra 3% Stamp Duty requirement on each additional property
• You are liable for income tax on all earnings from your rental property(ies)
• When you sell your rental properties, you’ll have to pay both capital gains and income tax on any profit you make

Tax Benefits

As a landlord, you are able to get tax relief on some of the costs involved in property rental so long as you’re a standard rate tax payer; these include property repairs, council tax and utilities (that you pay), letting agency and other property management fees. 

How can a Mortgage Broker help me to find the right Buy to Let mortgage?

Buy to Let Mortgages are available from both high street and specialist mortgage lenders, however, choosing the most suitable mortgage offer for you can be confusing. In order to achieve optimal profit from your Buy to Let property, it’s important to get mortgage rates that work for you. At Heritage, our knowledgeable brokers can help you to secure a mortgage deal to suit you, whatever your circumstances.