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Our buy to let mortgage calculator makes it easy to see how expensive your BTL mortgage could be. It’s quick and easy to use and gives you an instant idea of your monthly and yearly payments. Of course, the best way to find out which buy to let mortgages you can get on the market is to contact Hank Zarihs Associates for the latest and most competitive deals from trusted lenders, but the buy to let mortgage calculator is a handy tool for your planning.
buy-to-let mortgage rates
Buy to let mortgages vary greatly according to lender, LTV, sum to be borrowed, desired term and fees. Our mortgage calculator lets you see how much that all-important monthly payment could be, and the impact of changing interest rates – allowing you to carry out sensitivity analysis for different deals. The calculator will help you to establish affordability and to work out how factors such as your deposit, term and rental income would affect your repayments and the all-important yield, or return, on your investment. After all, most buy to let mortgage lenders expect borrowers to be able to make a yield of around 125% of rental income against monthly mortgage costs, so it’s important that you can maintain a healthy ratio to minimise risk.
How does the buy to let calculator work?
The online buy to let mortgage calculator is extremely easy to use. Simply add the value of the property that you are seeking to buy or remortgage and the loan to value sum that you will be seeking to achieve (either via a deposit or equity). Then, add your expected or existing rental per month and your rent per annum. In the following box, you can also add figures for the stressed % and the multiple % (for example, if the lender expects a rent to mortgage payment ratio of 125%, you would add this here). This then tells you what your required monthly and annual rental income would need to be to meet lender terms.
In the third box, add the interest rate and the lender fee to see how much the mortgage itself would cost you each month and over the year. By adjusting these figures, you can see the impact that changing different variables has on key factors such as your rental cover, and interest payments.
Benefits of a buy to let mortgage
The buy to let mortgage market has exploded in recent years, as individuals, companies, trusts and partnerships seek to invest in buy to let properties to build a rental income and grow and asset base, in what can be a profitable investment if well managed. Although the tax position of buy to lets has become arguably less favourable in recent years (primarily as the interest portion of BTL mortgages has lost its tax-deductible status), landlords and investors across the UK are still keen to snap up BTL properties and to build up healthy and rewarding investments with a strong return, especially in the buoyant rental market.
Enjoy an investment with income
With a buy to let property, you offset your monthly mortgage repayments with rental income from your tenant/s. Most lenders will expect to see a rental cover of at least 125%, which means that you will be earning a residual income; either to reinvest or to set aside for the costs of maintaining your BTL property over time.
Grow an asset over time
The beauty of this type of investment is that it offers an income and underlying asset growth at the same time, with the property market enjoying steady and strong growth in the UK. British property is seen as being an attractive and solid investment for the longer-term and many investors and landlords buy this type of property as part of their pension or equivalent long-term portfolio asset.
Outperform other asset classes
Interest payments on savings accounts are low, and the stock market is volatile. The British property market is a favoured asset for many investors who are building a high-performing portfolio, with strong underlying demand for quality rental properties and the ability to enjoy healthy returns in many areas where rental yields are high, along with the growth of the property asset itself over time.
Low interest rates also mean that buy to let mortgages in the UK are currently very attractively priced and widely available from trusted lenders. This offers applicants the chance to buy investment properties to rent or to remortgage existing BTL properties at favourable rates- especially when those mortgages are secured through a broker such as Hank Zarihs Associates, which has access to the most competitive deals on the market.
Check out our rental yield calculator
Most lenders will require a certain rental yield or cover in order to agree a mortgage. This is because the landlord must have a margin of income above the mortgage repayment itself, in order to cover the costs of maintaining a BTL investment (such as repairs etc.) The rental yield lessens the risk for the lender and borrower alike. By using our rental yield calculator you can input your anticipated or existing yield against the sum you wish to borrow, the term and the interest rate and see whether a) it is sufficient to meet your lender’s requirements and b) what the impact is on your monthly mortgage repayments.
How are buy to let mortgages calculated?
Buy to let mortgages are offered according to the value of the property, the applicant’s credit rating, the underlying base rate, and the applicant’s deposit. The costs will include fees such as the broker arrangement fee, exit fees, legal fees and valuation work and full details of these are provided in the tailored illustration.
Buy to let mortgage examples
For the latest buy to let mortgage examples, use our calculator to input indicative interest rates at your estimated LTV – bearing in mind that a lower LTV (say, 60%) will be cheaper to service with a loan than a higher one of around 85%. Most lenders will want to see an LTV of at least 75%.
What makes buy to lets a great investment?
A great buy to let investment will offer both income, growth and a stable investment asset which doesn’t constantly fluctuate in value like the stock market, and which earns better returns than savings accounts. Rental demand is also projected to stay consistently strong in the UK.
How much can I borrow?
This will depend on a variety of factors such as your creditworthiness, deposit or equity, borrowing needs, existing borrowing and the underlying market conditions. Hank Zarihs Associates can help you to secure the mortgage that you need to meet your property investment ambitions, with a panel of ready lenders with a great track record in the field.
What are typical returns on a Buy to let property
Returns on a buy to let property vary significantly according to property type and region. For example, HMOs – or habitats of multiple occupancy – can typically provide higher yields but the risks are higher. It is important to factor in risks and growth of the property as well as rental income. Factors such as tenant turnover and non-payment costs (including evictions and costs of managing a property) must also be factored in; something that landlords learn to do over time and with experience.
What are good returns on a buy to let investment?
The true answer here depends on how much of your own cash you are using to finance your BTL. The higher geared your rental property is (e.g. the higher the amount of finance you have secured on it – whilst still maintaining full rental cover) the better your return, as your tenant is repaying the mortgage to your lender, while you enjoy the underlying asset growth – and potentially net income gains too. You can work out your ROI by taking your net annual profit (after costs) and dividing it by the cash that you’ve invested, before multiplying it by 100 to get a percentage figure. If you can achieve an ROI that exceeds other asset classes, you are doing well. If you can repay the mortgage with a repayment BTL mortgage, then you will also be increasing your asset base – useful if you are building a pension pot for example.
What is the best buy to let mortgage for your property?
The best buy to let mortgage deal for your property will depend on your own personal situation and objectives. Our team of experienced lenders can help you to access the best possible buy to let mortgage deals from tried and tested BTL lenders and to access rates which aren’t typically available on the open market. We also provide expert and transparent information so that you can make a confident choice with complete peace of mind in the product that you choose – and we work on a long-term relationship basis too. In fact, many of our clients value our service so much that they use us time and time again as they remortgage their BTL properties and build their portfolios.
Speak to our brokers to get the best mortgage
Our team are on hand to help you secure the best BTL mortgage for your needs. It takes us just five minutes to gather the information that we need to work with our panel and to provide you with a list of tailored offers within the hour. Contact us today on +44 (0) 20 3889 4403 to discuss your needs. Our team operates from 9 am to 9 pm, Monday to Friday. You can also complete our online web callback form to request a call from one of our brokers at a time that best suits you.