Buy to let mortgages

More and more people are buying properties to let out privately. The reason for this is that the population of Britain is rising; more and more people are in need of accommodation, interest rates are low and mortgage lenders are offering packages designed specifically for this purpose of letting.
It is most common for buy-to-let investors to take out an interest-only mortgage as opposed to a repayment-mortgage. With this form of mortgage, the investor only has to pay the interest on the property every month, and not the capital. Repayment of the capital is usually covered by long term payment into an investment scheme which is designed to have accumulated sufficient returns by the end of the term to pay off the loan.
There are a few things that you should take into consideration when buying a property to let out. Firstly, you will be expected to put down a deposit of at least 20 % of the property value for your mortgage. Secondly, be aware that if you are letting your property on a period of less than twelve months, you will still have to pay loan repayments during the months during in which no rent is paid. For this reason, mortgage lenders stipulate in agreements that the overall rent charged to tenants accounts for 130 % of your mortgage repayments.
In the past the only kind of mortgage available for people buying-to-let, were variable rate mortgages, where the rate of interest charged on a loan moved in accordance with the changing interest rates set by the Bank of England. In the early 1990s and 1980s, base rates were extremely high and this made variable rate mortgages unattractive as options. Now interest rates are low, and mortgage lenders are offering a range of products from fixed rate mortgages, to discount and tracker mortgages. This flexibility offers potential landlords the opportunity to make a sound investment.