Best overall rate BTL LTV75%

brisk

Is there anything out there which can beat HSBC Premier 2.9% lifetime tracker for 75% LTV BTL mortgage? Think it's a better option than switching between Fixed rates too. Property value is 600k.

Thrugelmir

Depends on your view as to how quickly base rate will rise once the touch paper is lit.

dimbo61

Who knows ! Next week TSB/Halifax/Barclays might offer a cheaper deal.
£600,000 for a BTL property Ouch !
I hope you manage to let it from day one and never have a void period.
The mortgage payment at 2.9% on £450,000 will be £1087.50 Interest only plus the fees that
HSBC charge and the other costs of buying and ownership.
You are also using £150,000 of your savings as the deposit so I hope the property is going to give you a yield of 6/7/8% on £615,000 ?

brisk

Well I plan to buy 2-3 properties at around 600k each this year in London 75% LTV.

Why would I need a yield that high? On a 2 bedroom in London this isn't really possible. Even at 4.5% gross rental yield I can get 27k per year back. Let's say I only get 90% of that: 24300. Minus 13050 for the mortgage: 11250. Tax that at 40%: 6750. Allow a few 1000s for additional costs...seems break-even is quite achievable. Am I missing something?

I think it's more about capital growth in London. The rental income pays the mortgage and other costs.

kingstreet

I can't speak for HSBC but in many cases, you'll only be able to borrow £360,000 on a rent of £2,250 per month.

That's because the rental cover formula is 125% of monthly mortgage interest x 6%.

At 5.5% which one lender accepts, the max loan increases to £392,727.

So the maximum is the lower of 75% or the amount justified by the rental income.

You'd need a rental income of £2,812 per month for a £450k mortgage.

brisk

The BTL mortgage is based on my salaried income not rental income. I've had the decision approved in principle.

kingstreet

brisk wrote: »

The BTL mortgage is based on my salaried income not rental income. I've had the decision approved in principle.

You said you're going to do several.

Is this your approach for one of them or for all of them?

dimbo61

Your BTL empire depends on the London housing market going up every year.
BTL should stand up on rental income not how much the property will go up in 12/24/36 months.
So you have £150K to buy one ! What about deposits for 2&3
Good luck
Up north we look at rental yield

brisk

kingstreet wrote: »

You said you're going to do several.

Is this your approach for one of them or for all of them?

Yes because the bank allows me to borrow more this way. I can get 75% LTV

brisk

dimbo61 wrote: »

Your BTL empire depends on the London housing market going up every year.
BTL should stand up on rental income not how much the property will go up in 12/24/36 months.
So you have £150K to buy one ! What about deposits for 2&3
Good luck
Up north we look at rental yield

It doesn't depend on the London housing market going up every year. It depends on it being up when I choose to sell the properties.

I demonstrated how a 4.5% rental yield could easily cover the mortgage payments.

I have 450k cash to use for 3 deposits.