Mortgage question.. please help

captainzorro

Hi All,

We are planning to buy a new property to rent it out.

I have found the buy-to-let mortgage rates which are quite high starting from 5.69% fixed for 2 years. arrangement fee is 3% which comes to about £3,300. Does anyone know how can i compare which will be the cheaper mortgage from the interest rate and the product fee combined?

Does anyone know which mortgage lender would provide us with the lowest rate?

We already have 30% deposit towards the house.

Also can we buy a normal mortgage, i.e. not buy to let and rent the property to tenants as this would cost us very less compared to buy to let mortgage? IS this allowed or are we obliged to have a buy to let mortgage if we are going to rent the property?

There are many properties in england which are on rent. I fail to understand if all those houses are on buy-to-let, how does it work?

Please help. Thanks in advance.

Beardmidget

I have found the buy-to-let mortgage rates which are quite high starting from 5.69% fixed for 2 years. arrangement fee is 3% which comes to about £3,300. Does anyone know how can i compare which will be the cheaper mortgage from the interest rate and the product fee combined?

Comparison websites like https://www.moneysupermarket.com (others are available!) are the kind of place I would start if I was wanting to find a deal myself. I am not sure which of these sites will genuinely give you the best deal for BTL mortgages- but they will all show you the rate, the length of the fix, and they'll let you see the associated fees.

Does anyone know which mortgage lender would provide us with the lowest rate?

Again, the comparison websites will tell you this. There are loads of different banks and building societies and you never can tell who will have the best deal. Speaking personally though, I'm a big advocate of mortgage brokers for taking the hassle out of finding a good deal that's right for you.

Also can we buy a normal mortgage, i.e. not buy to let and rent the property to tenants as this would cost us very less compared to buy to let mortgage? IS this allowed or are we obliged to have a buy to let mortgage if we are going to rent the property?

The short answer is no.
You must have permission from your mortgage lender to let the property- and given that this is your intention at the outset- you will have to declare this during your application, meaning you are forced to take a BTL mortgage. They are available because people want to buy in order to let.

There are many properties in england which are on rent. I fail to understand if all those houses are on buy-to-let, how does it work?

I don't understand this question. What particular aspect of buy to let is it that you don't understand? If you are asking how there are so many people who own a property that they let to others, then I would think that is self evident? Otherwise you wouldn't be considering it surely?