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Mortgage Knowledge Base Mortgage Types Buy to Let Mortgage

Buy to Let Mortgage

Buy to Let mortgage is a type of mortgage, which allows a borrower to purchase a property for purpose of renting it out to the tenants.

Facts about buy to let mortgage:

It is a popular option for many property investors, as they don’t have to prove their income, for the purchase and remortgage of the property. With buy to let mortgages lenders take into consideration, the income borrowers will receive from the rental payments, when assessing their ability to maintain the mortgage payments.

Although there are many benefits of taking a buy to let mortgage, there are certain limitations also. It generally offers interest rates that are slightly higher. It also requires a larger lump sum as a deposit. A minimum of 20% or 25% of the property value is required as a deposit. Borrower gets no facility for getting a tax relief, and sometimes he/she is also required to pay for an arrangement fee.

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