If you want to buy a property and are intending to rent it out, a buy to let interest only mortgage is one way of making it much more affordable to do so. We have expert knowledge of the mortgage market and can find you a great deal on a buy to let interest only mortgage. A buy to let interest only mortgage for letting purposes can be risky, but it minimizes your monthly costs.
Buy to let interest only mortgage
For an interest only mortgage, monthly premiums only cover the interest for the amount you have borrowed. Unlike a capital repayment mortgage, where your premiums repay part of the interest and part of the lump sum you borrowed, a buy to let interest only mortgage requires you to only cover the interest payments, leaving the capital borrowed untouched. This can be a good investment option, as it allows you to minimize your monthly premiums. An interest only mortgage can be a risky option, however, as you will still have the entire amount borrowed to repay when the mortgage term comes to an end.
Interest only buy to let
Interest only buy to let mortgages can make it much easier for you to get on the rental property ladder. Most interest only buy to let mortgages have an overpayment threshold, meaning that you can choose to pay more than your minimum premium requirement, which gets taken off the capital you borrowed, reducing the final sum to pay. The amount you can repay is usually capped to around 10 per cent each year, but this has the advantage that you can pay higher premiums to clear some of the large debt when you have the money, or make only minimum payments when money is tight.