Buy to Let Mortgages Loan to Value Rates
Buy to Let Mortgages Loan to Value Rate
What is a loan to value (LTV) rate?
Similar to any other mortgage, a buy to let mortgage requires the borrower to put down a deposit on the property. However, whilst a homeowner can often secure a residential mortgage for as little as 5%, you are more than likely going to dig deeper into your pocket to secure a buy to let mortgage.
Loan to value is all about how much mortgage you have in relation to how much your property is worth. It’s usually expressed as a percentage figure that reflects the percentage of your property that is mortgage and the amount of equity you own. Consequently, if you owe more on your property than it is worth, it is known as being in negative equity.
Currently, buy to let mortgages are available of up to 85% loan to value, meaning the borrower would be required to put down a deposit of 15%, however these rates are rare and a more realistic loan to value figure you can expect to receive is 75%.
How to reduce the LTV rate on my property
Ensuring you keep your LTV as low as possible is key, particularly if you are planning on remortgaging your property. There are two ways in which you can influence your LTV dependant on what mortgage you have.
Repayment mortgage – With a repayment mortgage, your monthly payments include both the accrued interest and a portion of the actual loan so you repay it gradually. On maturity, the entire debt is clear
Interest only mortgage - Interest only mortgages involve only paying the interest during the term, and are a popular choice due to the lower monthly repayments. However, you will still owe the entire loan amount when the loan matures; and consequently, won’t reduce your LTV.
As a mortgage broker, we can give you advice and help you find the best mortgage deal with a LTV rate that suits your personal circumstances. We provide a whole of market service, which means we have access to exclusive, leading buy to let mortgages with a range of different LTV rates. If you would like any advice or guidance on purchasing a mortgage with a suitable LTV for you, why not call us today on 0117 313 7780, for a free initial consultation with one of our buy to let mortgage advisory team, or fill in the online contact form to request a call back.