Quick Question about Buy to Lets and Personal Mortgages

JPMcQueen

Hi, I have an appointment booked with an independent advisor but thats not for a few weeks and I have a quick question.

When calculating a personal mortgage, do they take in to account any buy to lets in calculating the amount you'd be able to borrow i.e. covering the B2L mortgage costs if the property was empty?

My partner and I are looking to buy a property together as our main home but we both have lets from the houses we had before we got together (we've been renting a joint property).

kingstreet

Many lenders will ignore a let property/mortgage in the background as long as it is considered self-financing.

The usual worst measure of that is rent must be equal to or greater than 125% of monthly mortgage interest at 6% per annnum, with some lenders using slightly lower rates.

AnotherJoe

I take it you know about the extra 3% SDLT on the property you'll be buying?

JPMcQueen

Yes, the extra 3% is not exactly welcomed but I'm looking at my rental property as part of my retirement plan so really dont want to sell it just to avoid the extra 3%

Thrugelmir

Recommendation currently under discussion, with one lender having already changed their criteria ahead of any regulatory requirement. Is that rent is to be based on 145% of rental income.

amnblog

Not in the case of calculating load for affordability on background loans as referred to by KS above.