Buy to Let

As with any financial commitment, it is essential that you find out all you can before you make any decisions.  Halifax understands if you're investing in property then you probably have a number of questions; 

• What is a Buy to Let mortgage and how much could you borrow?  
• Who can purchase a rental property, and can you buy a property to let if you already have a residential mortgage?  
• What type of Buy to Let mortgage is right for me?   

We will help guide you through some of the answers to these questions and explain some of the aspects you will need to consider before you step on to the Buy to Let property ladder.

What is a Buy to Let mortgage and how much could I borrow?

A Buy to Let mortgage is specifically designed for the purpose of financing a property that is to be rented out.  All our Buy to Let mortgage deals are designed to be self financing.

The idea is that your rental income covers the Buy to Let mortgage commitments including the associated costs such as insurance, minor repairs, service charges, letting agent fees etc. 

You will need a minimum income of £25,000 per year to apply for a Buy to Let mortgage and be a UK resident, aged 25 or over.  

• You could borrow up to 85% of the property value (or purchase price, if lower)   
• You could borrow up to £10 million in total on Buy to Let lending across the HBOS group, however individual loans are restricted to £1 million.
• Annual rental income must equate to a minimum of 125% of the annual (interest only) mortgage payments, calculated at Bank of England base rate +2.00%.  This rate will apply to the rental income calculations for all Buy to Let cases regardless of the actual product rate.
• The mortgage valuation will include an estimate of the rental income of your chosen property on an unfurnished basis.

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Who can purchase a rental property, and can you buy a property to let if you already have a residential mortgage?

If you currently have or have had a mortgage with us or another lender then you could apply for a Buy to Let mortgage

Things to consider before you Buy to Let?

Buying a rental property is very different from finding a home. Remember, this is a business decision which you should treat as an investment, take care not to get carried away imagining yourself living in the house. Be objective and focus on who is likely to rent the property you are looking to buy. 

To help you decide on the right type of rental property, here are five handy tips for you to review when you view any property.

1. What type of tenant are you looking for? Think carefully about the type of tenant you want to attract e.g. Young professionals, families or sharers. Considering this issue may help you to decide on the type of property you purchase and its location. Remember that Halifax Buy to Let properties have to be let on an Assured Shorthold Tenancy basis.
2. Where’s the best area? Do your research and visit lots of different areas. Location is an important consideration and will often determine the type of tenant you will let to. Don’t necessarily buy locally to your home. Think about prosperous towns which might attract a higher demand for rental property
3. What’s the location like?  Think about transport links, parking, shops, schools and other local facilities – pick the brains of letting agents for information about areas where properties may be easier to rent.
4. What state is the property in? If you're buying a property which needs improvements, then restrictions could be placed on the amount you can borrow and it could also delay how quickly you can let the property out. Can you afford the mortgage payments during the renovation period?
5. How much rent are you likely to receive? Do your homework – talk to local letting agents, check the local press to find out comparable rental values.
   

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What else do I need to know?

Buy to Let can be a huge investment and like all types of investment it carries some risks. Our Mortgage Advisers can help you understand the financial commitments involved, but can't offer you advice on whether this type of investment is right for you based on your individual financial circumstances.

Please remember there are no guarantees as to what rental income your Buy to Let property will generate and whether it will rise in value over the years. The Council of Mortgage Lenders has published an online guide which you can review if you want more general information or advice.

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What type of Buy to Let mortgage is right for me?

We offer a range of Buy to Let mortgage deals designed to meet your individual circumstances. Our Mortgage Advisers will be happy to discuss the range of mortgages we offer.

If you decide you would like to apply for a Buy to Let mortgage our Mortgage Advisers will be happy to talk to you about the range we have available – so why not talk to us today?

Find out more about our Buy to Let mortgage range

> Buying a Buy to Let property

> Switching your Buy to Let mortgage

Halifax can only advise on the mortgages it offers. We cannot offer advice on whether Buy to Let is the right form of investment for you.

Your property may be repossessed if you do not keep up repayments on your mortgage.

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