Buy to Let Interest Only

A buy-to-let interest-only mortgage is designed for landlords looking to purchase a rental property as an investment. With this type of mortgage, your monthly payments cover only the interest on the loan amount, meaning your payments are typically lower than they would be with a repayment mortgage.

However, the capital debt (the amount borrowed) remains unchanged throughout the mortgage term unless you choose to make extra repayments. At the end of the term, the full loan amount must be repaid, which can be done by selling the property, refinancing, or using other funds. This option may suit landlords seeking to maximise cash flow or those planning to sell the property for a profit at the end of the term.

Whether you’re new to property investment or expanding your portfolio, Buy to Let Mortgage Brokers can help you find the right interest-only mortgage to meet your needs. Our advisers will assess your circumstances, rental income expectations, and goals to match you with the most suitable lender.

We compare thousands of deals across the market, including a range of deals from our lender panel, helping you find a competitive deal suited to your needs. Not just the lowest interest rate, but also the most favourable fees and charges. Once you’re ready to proceed, you’ll receive support from a dedicated case manager who will handle the entire process.

Eligibility for a buy-to-let interest-only mortgage depends on your rental income, deposit size, and personal circumstances. Lenders typically require that your rental income exceeds the monthly mortgage repayments by a specific margin, usually between 125% and 140%.

While criteria vary by lender, some general requirements include:

• A minimum annual income of £25,000
• A minimum age of 21 (with some lenders also having an upper age limit)
• Being a homeowner (many lenders do not accept first-time buyers)
• A deposit of 15%-25% of the property value (though higher deposits often secure better rates)

Additionally, as a landlord, Tax relief on mortgage interest is subject to current regulations. We recommend consulting a qualified tax adviser for advice specific to your situation. For specific advice on tax matters, we recommend consulting a qualified accountant.

Interest-only mortgage rates for buy-to-let properties are generally higher than standard residential rates, reflecting the perceived higher risk of tenants compared to owner-occupiers. However, putting down a larger deposit, closer to 25% of the property value, can increase your chances of securing better rates.

To explore the impact of changing interest rates on your mortgage repayments, you can use our online mortgage interest rate calculator. Simply enter your loan amount and term, and we’ll do the rest.

When your mortgage term ends, you’ll need to repay the full loan amount as you’ve only been paying interest. It’s essential to have a clear repayment strategy in place from the start, whether that involves selling the property, refinancing, or using personal savings.

Many landlords plan to sell their rental properties at the end of the term, ideally at a higher value than the purchase price, to repay the loan and potentially make a profit. Whatever your repayment plan, it’s important to review it regularly to ensure it remains achievable.

Ready to apply for a buy-to-let interest-only mortgage? Buy to Let Mortgage Brokers is here to guide you through every step. We’ll compare deals from over 50 lenders and help you find the most competitive and suitable option for your needs.

Our user-friendly Mortgage Finder makes it easy to explore your options, and once you’ve chosen a deal, you can apply online and track your application 24/7. Don’t let the process overwhelm you, let our expert advisers handle the hard work.

Get in touch with Buy to Let Mortgage Brokers today and see how we can help you secure the best deal for your investment property.

Get in touch with us by using our easy-to-use mortgage calculator, and we’ll take the time to find the best deal tailored to your specific needs and financial goals.