Which Mortgage Is Right For You?

If you’re just starting out in real estate or already own several properties, chances are you’ll need a mortgage to fund your investments at some point.

Choosing the right mortgage for your property is crucial.

Talking to a mortgage broker or advisor is recommended to get expert guidance and access to the best mortgage offers available.

Our property investment specialist, Emerald Fisk, shares valuable insights on mortgages, so be sure to watch her advice to better understand your options.

A mortgage is a loan used to buy property. You borrow money from a lender, like a bank or mortgage company, to purchase a home to live in or rent out, then repay it over time with interest.

Different Types Of Mortgages

Buy-to-Let Mortgages:

These are for those who intend to buy a property to rent to tenants. There are specific requirements to qualify, such as a minimum age, income, and the number of properties you can own. Expect to put down a larger deposit, usually 20-25% of the purchase price.

HMO Mortgages:

This mortgage suits properties rented to multiple tenants from different households, sharing facilities like kitchens and bathrooms, known as HMOs. They must be licensed and meet government standards, and not all lenders offer HMO mortgages.

Serviced Accommodation:

If you plan to list your property on sites like Airbnb, VRBO, or Booking.com, the lender needs to know. Informing them helps assess risks and set loan terms, ensuring they comply with regulations when lending based on the property’s specific use and earnings potential.

Semi-Commercial Mortgages:

For properties that blend residential and commercial spaces, such as apartments over shops, lenders have certain requirements that borrowers need to meet, focusing on the nature of commercial use, the borrower’s stability, and the loan-to-value ratio.

Multi-Unit Freehold Block Mortgages:

This mortgage is for those looking to buy or refinance several units in one building or block, held under one freehold title. Lenders look at the rental income of the whole block to decide if the investor can afford the mortgage.

Understanding Mortgage Rates

Use an online mortgage calculator as a starting point to estimate your borrowing limit and monthly payments before consulting a mortgage advisor or broker. With fluctuating mortgage rates, it’s smart to stay informed, and setting up Google Alerts can keep you updated on any major news.