If you're looking to invest, or rearrange a mortgage on a buy-to-let property, how do you pick the right deal for your circumstances?
Many people are looking towards the property market as they seek higher returns than those offered by traditional savings accounts and other forms of investment.
Buy-to-let investors often get mortgages on an interest-only basis - though repayment options are available if that is appropriate for your circumstances. Remember while property prices have risen in the last few years, there is no guarantee that values will keep increasing.
Our Moneywise Best Buys are selected based on someone borrowing on an interest-only basis against a £250,000 property for 20 years, at either 60% or 75% loan to value (LTV). Our buyer is paying all fees up front.
Top buy-to-let mortgages at 75% LTV
There are a range of options for borrowers with a 25% deposit with rates at historic lows, here are our buy-to-let Best Buys this week.
Sainsbury's Bank, up to 75% LTV, 1.81%
Fixed until 31 October 2021, then reverts to SVR (currently 5.24%)
Sainsbury's Bank has the cheapest two-year fixed rate deal charging interest at 1.81% with scheme fees of £1,044 Monthly interest repayments are £283. For the first two years the annual cost is £3,916.
The Mortgage Works, up to 75% LTV, 2.19%
Fixed until 30 September 2024, then reverts to SVR (currently 4.24%)
This five-year fixed mortgage has monthly repayments of £342. This includes fees of £2,044 and gives a total annual cost of £4,515.
NatWest, up to 75% LTV, 1.95%
Base rate + 1.20% for two years then reverts to SVR of 4.74%.
If you're willing to take your chance with a variable rate mortgage then NatWest offers this deal. There are no scheme fees and monthly payments are £305 - equivalent to £4,029 per year.
Best buy-to-let deals at 60% LTV
Deals are more attractive with a 40% deposit and many rates are available for well under 2%. You’ll need to remember to factor in the fees, which in some cases makes the total cost much more expensive.
Barclays, up to 75% LTV, 1.48%
Fixed until 31 October 2021, then reverts to SVR (currently 4.24%)
This deal has a rate of 1.55%, fixed until 31 October 2021 meaning it’ll cost £194 per month to borrow £150,000. There are fees of £299 and the annual cost is £2,475.
TSB, up to 60% LTV, 1.74%
Fixed until 30 November 2024, then reverts to SVR (currently 4.24%)
For a longer fix, this rate is guaranteed until 30 November 2024. The total monthly cost is £218 per month with fees of £994, meaning the annual total is £2,809.
Furness Building Society, up to 60% LTV, 4.50%
Rate is 1.29%, then reverts to SVR (currently 5.79%)
Furness comes out on top of the variable deals. Repayments are £161 per month with fees of £999, meaning a total cost of £2,435 per year.
- L&C will compare, advise on and arrange the best mortgage for you from 1000's of deals
- You'll always get advice from a qualified mortgage expert
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Call free on 0800 073 1936 or see mortgage best buys online.