Buy to Let Mortgage Calculator
This Buy to Let mortgage calculator will help you determine how much your monthly repayments could be on your next UK property investment purchase.
As at September 2022
Simply enter the amount, mortgage period and interest rate to find out what it will cost each month.
Our mortgage calculator prepopulates monthly mortgage payments based on present Buy-to-Let mortgage products available. All figures are indicative and for illustrative purposes only.
Based on what you entered, We think your mortgage will cost
Surrenden Invest’s qualified mortgage professionals can provide advice on mortgages and financial services. With access to a wide range of mortgage deals, our expert team will listen to your needs and will deliver a bespoke solution. From your initial mortgage enquiry, our mortgage professionals will guide you through the entire mortgage and house-buying process. Your mortgage adviser and support team will ensure that you understand all aspects of the transaction, receive regular updates throughout the journey, and ensure things run as smoothly and efficiently as possible.
Low interest rates are one of the most attractive reasons to invest in UK real estate for property investors. Historically speaking, interest rates remain at a record-low, which means that the cost of borrowing remains cheap for those planning to fund an investment property with a Buy to Let (BTL) mortgage.
The Bank of England increased the base rate to 0.25% in December 2021, and while there is scope for rates to rise in 2022 and beyond, the cost of borrowing is unlikely to increase significantly over the next five years. The latest report from Savills predicts that the Bank of England will increase the base rate gradually to reach 1.5% by the end of 2026.
Property investors who wish to fund their next purchase by accessing a Buy to Let mortgage product should seek professional advice to access the best deals available on the market. To get an idea of your monthly repayments, use the Buy to Let mortgage calculator at the top of this page.
Naturally, investors should also be aware of affordability constraints should interest rates increase. As a result, buyers should compare fixed-rate mortgage options, which could insulate them from rising rates and stress-test affordability over the long term.
A wave of changes introduced by the government to make the property market more accessible to owner-occupiers includes changes to tax relief on Buy to Let mortgages.
As of April 2020, the way investors and landlords declare their rental income has changed, which means that mortgage expenses are no longer deductible from rental income as a method to reduce overall tax bills.
Instead, landlords receive a tax credit which is based on 20% of the mortgage interest payment. It is worth noting that higher tax-rate payers can no longer claim back tax on mortgage repayments. We advise that you seek professional advice when dealing with your taxes.
Those building a property portfolio or planning to become a full-time landlord may wish to explore the benefits of purchasing rental properties through a Limited Company structure. In some cases, this strategy is more tax-efficient for investors.
Due to the complex nature of the UK’s tax system and the fact that there is no one-size-fits-all option, contact Surrenden Invest for more information on the best option for you.
Although there are some similarities, Buy to Let mortgages are different from traditional mortgages. First of all, interest rates on BTL mortgages are typically higher, and BTL investors tend to put down a higher deposit. Secondly, while most owner-occupiers tend to repay the loan and interest on a monthly basis, most landlords with a BTL mortgage opt for interest-only mortgage repayments, which can be lower when compared to residential mortgages repayments. Terms and conditions are also different for BTL mortgages which is why Surrenden Invest recommends trusted professionals to help clients determine the best options available to them.
All Lenders use ICRs (interest cover ratios) to project how much profit a landlord will make from their rental property and whether it will cover mortgage repayments. Depending on the Mortgage Lender’s criteria, the property’s rental income should be at least 25% to 30% higher than the monthly mortgage payment. Lenders are likely to require applicants to have a regular source of income.
Before taking out any mortgage, it is important to understand that there are strict affordability rules in place for landlords and investors.
Buy to Let mortgages typically require a bigger deposit than more traditional mortgage deals; however, the amount will vary depending on the Lender’s criteria and the applicant’s individual circumstances. Therefore, it is always best to seek professional advice from a trusted Broker to secure the best mortgage product on the market. Surrenden Invest’s team of experts can assist with a recommendation. Contact us today to find out more.
No, landlords and investors cannot reside in a property purchased through a Buy to Let mortgage. Living in a rental property that you own could breach your mortgage conditions.
When selecting the right mortgage for you, landlords need to determine how long the mortgage term should be. Longer-term options generally cost less each month as repayments are spread over an extended period. However, you are likely to pay more because you will pay interest over a greater length of time.
Shorter-term mortgages tend to have a higher monthly repayment; however, if your goal is to pay off the balance in full, you will own the property outright faster, and you will most likely pay less interest.
According to data released in 2021 by Foundation Home Loans, 45% of properties in the average portfolio are owned outright, and 40% are funded with a BTL mortgage. The research also showed that around 6 in 10 landlords fund at least part of their portfolio through BTL borrowing.
There are several costs to consider when purchasing a property, including solicitors, survey costs, deposit, Stamp Duty, and the monthly ongoing payments related to a mortgage. These costs are broadly linked to the value of the property being purchased, and your mortgage adviser can talk you through all these related costs to ensure you are fully informed before committing to a purchase.
If you require more information about UK property investments after using the Buy to Let mortgage calculator on this page, contact the Surrenden Invest team.
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