Best buy-to-let mortgage?

chipotle_2

Which is the best buy-to-let mortgage or mortgage deal in the market at the moment?

Thanks for your ideas.

Chipotle

Dan_Collins_2

What a question almost impossible to answer!
We need to know more, LTV type of property etc. B&W, C&G and Abbey have some good deals B2L but its a tricky market and it really depends on the case!

master_ian

OK, whilst the question is out there...I'll have a go with some of my BTL details:*2 bed flat in east london*179K on the market*we have 15% deposit wanting to borrow over 25yrs*mortgage would be 152,150K*rental income = £830/monthconsidering a 2 yr tracker, however fixed is still an option.Suggestions?

A_Nice_Englishman

master_ian wrote: »

OK, whilst the question is out there...I'll have a go with some of my BTL details:*2 bed flat in east london*179K on the market*we have 15% deposit wanting to borrow over 25yrs*mortgage would be 152,150K*rental income = £830/monthconsidering a 2 yr tracker, however fixed is still an option.Suggestions?

My suggestion would be do re-think your business plan. Have you considered the stamp duty, solicitors charges, local searches, letting agents fees, insurance, void periods, repairs and bad debts, for example?

chipotle_2

My BTL is a 3-bedroomed maisonette in NE London. We currently live in a rented property outside London. No plans to sell.

With permission of the lender, we have kept the same mortgage arrangements as if we were living there for just under a year, but soon (once the year is over) we will have to change into BTL mortgage, and this is why I asked the question.

Thanks a bunch

Chipotle

A_Nice_Englishman

chipotle wrote: »

Thanks a bunch

Chipotle

Not sure if that was aimed at me, but my post was in response to master_ian who seems to be entering the property rental business on what I feel is an unsound basis

Sorry if I upset you.

chipotle_2

No worries, Nice Englishman. Hopefully tomorrow I'll get some replies.

Chipotle

herbiesjp

"Best" can mean diffrent things for different people depending on their situation and what they are looking for in a mortgage.

What are you looking for? Variable rate or fixed rates?

What is the property value? What is the mortgage amount?

Do you want free legal fees and free valuations?

What is the rental income that you get from the property?

master_ian

I have taken into account above expenses and have calculated with an IO mortgage for the 1st 2 years, will achieve 4 - 5% rental yield, and with the investment being 10 - 15 years, would this be considered an unsound decision?

A_Nice_Englishman

master_ian

These are my back-of-an-envelope figures

Rental income £830 / month
Assume 1 void month a year
annual rental income = 830 x 11 = 9130

Assume mortage interest at 6%
Mortgage interest 152150 x 6% = 9129

So by my reckoning you'd only just be covering the mortgage interest and making no return in the deposit, even before considering the other expenses.

master_ian

Mr Nice EnglishmanWe have mortgage in principle for 5.49 fixed (2 years) and have put £5K aside for mortgage fees, insurance, solicitors fees, stamp duty. Will be managing the flat ourselves as it is local to us. Negotiating at the moment and present 'price' is £175K. It is also fully refurbished.Therefore:rental income: £830 annual rental income (with 1 month void/yr) = £830 x 11 = £9130Mortgage interest: 5.49%mortgage £148750 x 5.49% = £8166£964 yield after expenses/annually.