Advice for buy to let mortgage for first time buyers

BelowTheLine

Retired_Mortgage_Adviser said:

AdrianC said:

But even if you manage to borrow £375k at 3.5%, that's £1,100 of interest alone per month (a repayment mortgage is going to be the thick end of £1,900/mo).

Not opining on whether it's a good investment or not (need lots more info for that) but that mortgage rate is well on the higher side. At  75% LTV

2 year Barclays (who do lend to FTL non-homeowners) fix is 1.7%+fees, or 1.91% on a total cost basis.

5 year Barclays fix is 2.13%+fees or 2.22% on a total cost basis.

They have some rock bottom rates for landlord mortgages. Just remortgaged last month to a 2 year fix at 1.35%! It's only 57% LTV though. Rates have cratered in the last couple of years.

steampowered

This doesn't sound like a great idea to me:

- You are using up your first time buyer stamp duty benefits.
- You will need to pay higher rate SDLT if you do buy a property of your own.
- You will need to pay income tax on the rent and capital gains tax if you sell the property, not to mention the other costs associated with being a landlord.
- You are typing up your savings making it more difficult to afford a property of your own in future.

Personally I would be putting excess savings into a tax efficient investment such as a stocks & shares ISA, with a view to buying a property of your own when you are ready to do so.

amnblog

Barclays used to refuse FTB's for BTL but I believe they will now do it.

a.ahmed0162

Thanks for your reply 
Am just so curious now I know the advisor told me not to worry but am just worried despite it was accepted on the system the underwriters will try and find something

AdrianC

Retired_Mortgage_Adviser said:

AdrianC said:

But even if you manage to borrow £375k at 3.5%, that's £1,100 of interest alone per month (a repayment mortgage is going to be the thick end of £1,900/mo).

Not opining on whether it's a good investment or not (need lots more info for that) but that mortgage rate is well on the higher side. At  75% LTV

2 year Barclays (who do lend to FTL non-homeowners) fix is 1.7%+fees, or 1.91% on a total cost basis.

5 year Barclays fix is 2.13%+fees or 2.22% on a total cost basis.

Furry muff. And outside of those lock-in periods?

No point in building a long-term business plan on short-term carrot-dangles, is there?