This buy-to-let mortgage calculator helps you determine how much you can afford to purchase a property to rent out.
How this buy-to-let calculator works
This buy-to-let calculator helps calculate how much you are able to afford on an investment property in the Uk.
What is a buy-to-let mortgage?
The purpose of a buy-to-let calculator is to help you purchase a property that you plan to rent out. Buy-to-let mortgages are very similar to standard residential mortgages in the UK with a few key differences that you should be aware of.
The first difference is that lenders will often require a larger deposit to be eligible for a buy-to-let mortgage. The mortgage interest rates are also typically higher on buy-to-let mortgages with the increase in risk. While residential mortgages look at the individuals income, buy-to-let mortgages typically use the income the property could possibly make through rent as a basis for how much they will loan you.
The total cost of a buy-to-let (BTL) mortgage relies of a few key factors. The first factor is the size of your deposit with a larger deposit meaning that you will have a smaller outstanding loan which means paying less interest. The next key factor is the loan term. A longer long-term means that you will pay more interest over time, but will help to keep your payments initially low.
What is the criteria for a buy-to-let mortgage?
While various lenders have specific criteria for buy-to-let mortgages, there are a few important considerations to help you determine if you may be eligible.
You must be older than 21 years for a buy-to-let mortgage. Lenders typically want to see a deposit of at least 25%. The rental income that you receive should cover at least 25% of the monthly mortgage payment. Lenders will often want to see that the individual has good credit history in addition to meeting a minimum income requirement in addition to the rents expected to be generated from the property.