How Do I Find The Best Buy To Let Mortgage?

It's not an exact science finding a good (good for you, that is) mortgage.  

Your best bet is to adopt a multi-pronged approach.  Ask 2-3 mortgage brokers what they can do for you.  Also use the many online websites to search for different types of buy to let (BTL) mortgage deals.  It may be worthwhile to personally visit local branches of banks and building societies that you trust to provide a good service, just to see what deals they may be able to offer that are not listed in the usual Best Buy tables because they are not specifically labeled as BTL mortgages.  Most of all, read up on every aspect of buy to let.   Even if you have been a landlord for a while there are always new ideas of how to do it better.  

Keep in mind that mortgage brokers are in business, too: They should work just for you to get the best deal, but the reality is that they A) may get better commission for some products than others, and B) they are usually tied to a certain range of products.  If you want truly independent financial advice you probably have to pay by the hour for it, but even that's not a guarantee of finding something that truly suits you best, either.


Those were the days.  Source: Flickr.com

There are some hefty challenges for would-be BTL-investors in 2009.  For one thing, a lot fewer products are on the market, and may come with detailed conditions about how the property is leased or mortgage.  Nowadays, most lenders require a 70% loan to value ratio (so you need to come up with at least 30% of the purchase price in cash).  And that doesn't include the cash needed for associated purchase outlays, like solicitor fees, repair costs, etc.  It's not so long ago that BL investors only needed to stump up 10-15% of the purchase price.  


The growth in BTL mortgages only started to slow down in 2006.  Source: Flickr.com

There are virtually no lenders willing to accept a loan to value ratio of less than 75%.  This creates huge problems for BTL investors who bought at the top of the market on short-term good rate mortgage deals, and who are now trying to remortgage.  The value of property in the UK has generally fallen so much that some BTL investors simply don't have enough equity in their properties to be able to refinance onto a new deal.  They are stuck with whatever rate their existing lender provides, even if rental incomes don't cover the payments.  This problem is especially acute for BTL investors who acquired interest-only mortgages, which was and still is widely advised.  Such investors may have no more equity in the property than they started out with; they may even have less equity now, where house prices have fallen since they bought.