From Debt Into Retirement

Fixed rate are the most popular buy to let mortgage rates. A fixed rate mortgage allows the borrower to enjoy stability in their monthly payments by locking in a set interest rate. By locking in the interest rate the borrower is protected from fluctuations due to market changes. Variable rate mortgages are also available. Variable rates may increase over time as market changes occur. Buy to let mortgage terms typically last between one and fifteen years.

Buy to let is when a person purchases a property, with a mortgage, and then rents it out. Rent paid by the tenants will typically cover mortgage payments, insurance and fees. Sometimes it even creates an extra source of income for the property owner. Purchasing a buy to let property is a long term investment. Some people use it to earn income to supplement their retirement income. Lenders can help a person who plans to invest in buy to let develop gross rent rates that cover at least 130% of the mortgage payments.

Fixed rates are available for mortgages up to $1,000,000 with interest rates between 2.99% and 7.39%. These terms are available up to five years. It is very common for lenders to charge an early repayment fee of 5%. Lenders charge these fees because they do not want to loose money from the interest they would be gaining if a borrower were to make payments for the full term.

Variable rates are ideal for the borrower that does not mind if their monthly payment increases. Overall, variable rate mortgages are not ideal for buy to let properties because they would require the property owner to continually increase tenants rent every time market changes cause an increase in the mortgage payment. Variable rates are still available for buy to let properties. Variable rates are available between 5% and 7% and do not have early repayment penalty fees. The benefit to variable rate mortgages is that the interest is typically below prime.

The best buy to let mortgage rates will be the ones that best fit the borrowers’ budget and circumstances. All loans are subject to credit approval. Borrowers with less than perfect credit can expect to have higher interest rates with their mortgage. If you would like to utilize benefits of both fixed and variable rate mortgages then consider a combined or split mortgage for your buy to let property.