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BTL 125% Initial rate?
phoenixcat9
Posts: 4 Newbie
Hi,
With a buy to let mortgage does the rent have to cover 125% of the initial mortgage rate or the follow on rate?
Cheers,
P
With a buy to let mortgage does the rent have to cover 125% of the initial mortgage rate or the follow on rate?
Cheers,
P
0
Comments
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Usually rent has to be at least 125% of the monthly mortgage interest, based on lender's selected rate.
I tend to use 6% as this covers practically every lender I can imagine using for a BTL.
I can think of lenders who use 5%, 5.69%, 5.25%, 5.99% etc.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Great, thanks. I thought it was the monthly payment, even if you did capital repayment.0
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'percentage cover' (usually between 125% and 140%) and 'calculating rate' (initial, svr or specific rate - often 5.99%) both depend on lender selected - a fairly large percentage of BTL mortgages are only available via intermedairiesHi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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No. Most use only interest payment, not capital & interest.phoenixcat9 wrote: »Great, thanks. I thought it was the monthly payment, even if you did capital repayment.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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