Interest Only Buy to Let Mortgage Calculator

Our Buy to Let Mortgage Service

Why choose us?

Fair Mortgages can provide you with a first class service if you are looking for buy to let mortgage advice. 

Special features of what we offer include:

• Whole of market broker - we deal with most UK buy to let lenders 

• Mortgage rates - Access to leading buy to let market rates (fixed rates and tracker rates)

• Exclusives - Access to exclusive buy to let mortgage deals not available on the high street

• Our BTL expertise - Expert help whether you are a first time investor or experienced full time landlord

• Credit issues? - We have lenders who will take into account previous defaults and missed payments 

• Experienced BTL investor? - Have a complex buy to let or have a portfolio of 5+ properties? - speak to us

To investigate your buy to let mortgage options, call our specialist team on 

Buy To Let Mortgage Hotline - Call 0117 403 4474

or fill in our call back form.  

Interest Only Buy to Let Mortgage Calculator

Interest only mortgages have become a popular choice amongst investors in the property industry, mainly due to the enticing lower monthly repayments. There are plenty of arguments both for and against the use of interest only mortgages, which is why you should take every factor into consideration before making your decision.

How does an interest-only mortgage work?

With interest-only mortgages you only pay the interest due on the amount you borrowed each month. While this can mean lower monthly payments than would be required for a standard capital and interest repayment mortgage of equivalent value, it does mean that you will still owe the entire capital that you originally borrowed at the end of the mortgage term.

One of the most important factors that you should consider before you take out an interest only buy to let mortgage is whether you can afford the monthly repayments. With the use of a buy to let interest only mortgage calculator, you are able to not only evaluate whether you can afford the loan, but also compare an interest only mortgage loan with other similar products from a range of different lenders.

How do buy-to-let mortgages work?

Deposit

Like a normal mortgage, a lender will require you to put down a deposit on the property, and the larger the deposit you can afford to put down the better interest you will receive.

As a general rule, lenders require a larger deposit than you would expect to pay for a buy to let mortgage of the same size, the standard minimum deposit size is often 25%. However, it is worth shopping around to see if you can find a buy to let mortgage with a loan to value that fits your needs.

Affordability

One of the key differences between a buy to let mortgage and a traditional mortgage is how your affordability is calculated. Instead of it being a multiple of your income, lenders generally require the property’s annual rental yield to be at least 145% (or 170% for houses in multiple occupation) of what your mortgage would cost you in repayments annually. 

Looking at property websites or speaking to a local letting agent could help you find out how much a property in a certain area could be let for. However, a lender will not base their calculation on what you are intending to charge for rent. During your application, there will be a professional valuation of the property that they will base the potential rental yield on instead.

As with other kinds of mortgages there is a range of repayment plans, where your monthly mortgage payments pay off a portion of your loan. There are also interest only plans, where you only pay the interest each month and repay the entirety of the loan at the end of the term of finance.

Stress Test

In addition to the requirement for a rental coverage ratio of at least 145%, landlords will have to endure an income stress test.

Lenders now apply a stricter income stress test than previous years to rental income. The income stress test is designed to minimise the risk of landlords falling into arrears on their mortgage payments.

To satisfy the lenders' income stress test, landlords need to illustrate that they can afford mortgage payments even in the event that the interest rates increase to 5.5%.

Portfolio Review

Lenders will request an in-depth review of the landlord's property portfolio for anyone with multiple buy to let properties.

In previous years, if a landlord had multiple rental properties and one of them was not profitable, they could spread the equity from a more profitable property to prop up their entire portfolio.

Lenders no longer look at properties in isolation and will not provide a buy to let mortgage to landlords with one or more properties that are not profitable. 

How do I calculate the interest on my buy to let mortgage

We offer a FREE buy to let interest only mortgage calculator to help you in finding the best deal to suit your individual needs.

If you would like any assistance with calculating the interest on your mortgage, or with any other aspect of your buy to let mortgaging needs; why not call us today for a free initial consultation on 

Interest Only Buy to Let Mortgage Calculator

Interest only mortgages have become a popular choice amongst investors in the property industry, mainly due to the enticing lower monthly repayments. There are plenty of arguments both for and against the use of interest only mortgages, which is why you  should take every factor into consideration before making your decision.

How does an interest-only mortgage work?

With interest-only mortgages you only pay the interest due on the amount you borrowed each month. While this can mean lower monthly payments than would be required for a standard capital and interest repayment mortgage of equivalent value, it does mean that you will still owe the entire capital that you originally borrowed at the end of the mortgage term.

One of the most important factors that you should consider before you take out an interest only buy to let mortgage is whether you can afford the monthly repayments. With the use of a buy to let interest only mortgage calculator, you are able to not only evaluate whether you can afford the loan, but also compare an interest only mortgage loan with other similar products from a range of different lenders.

How do I calculate the interest on my buy to let mortgage

We offer a FREE buy to let interest only mortgage calculator to help you in finding the best deal to suit your individual needs.

If you would like any assistance with calculating the interest on your mortgage, or with any other aspect of your buy to let mortgaging needs; why not call us today for a free initial consultation on

Buy To Let Mortgage Hotline - Call 0117 403 4474

or fill in our online call back form.