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As the name gives it away, a buy to let mortgage is a special type of mortgage designed for people who buy a property/house with an intention of giving it away. A buy to let mortgage is very much similar to other mortgages except for the fact that it requires a larger deposit or down payment and will have a lower LTV (Loan-to-Value). There may be other terms and conditions associated with a buy to let mortgage such as minimum letting out terms, rental income details etc. In such loans the rental income plays an important role in deciding how much money the lender is going to give you.
Why go for a buy to let mortgage?
Ever wondered why you should actually go for a buy to let mortgage rather than a normal mortgage and pay more money? In this case, the lenders have their side of the story. Generally when you are buying a house to rent out to someone else or sell off, the risk associated with the deal increases and the mortgage lender who is at the receiving side will automatically need to have security in the form of an increased down payment or deposit. This is the precise reason why lenders differentiate between the two types of mortgages as buy to let mortgages and buy to live in mortgages. But with the competition increasing and more and more players entering into the market the deposit rate for a buy to let mortgage has decreased a lot and is much lower than it used to be.
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