Using a calculator is essential if you are interested in a buy to let mortgage. If you are a landlord looking to buy a property for investment opportunities and rent it out to the public, it is important to use a calculator so that you know how much you need to borrow and what monthly rent you should be charging.
The beauty of a buy to let mortgage calculator is that you get to experiment with different property amounts and monthly rent so that you can find the right opportunity for you.
Using a calculator will let you know how much you can potentially borrow and put towards a property whether it’s a studio apartment, two-bed flat or 4 bedroom house.
Getting the numbers right with your buy to let investment is essential because you need to be able to make a profit. Typically with a buy to let property, you charge 125% of the mortgage fees in rent to the tenant. So if your mortgage is £1,000 a month, you ideally want to charge £1,250 in rent to your tenants and this 25% is you profit margin. Using a calculator allows you to cost things out effectively.
Using our buy to let mortgage calculator is completely free. You start by entering the price of your desired property and how much rent you would typically charge. You can get a valuation of the property from your local estate agent or by checking the listing in the newspaper. The monthly rent you would charge can be based on the demand of rented property in the area or what other people are typically paying per month.
So based on the property value and monthly rent, we will estimate how much you can borrow from one of the mortgage providers that we work with.
Next, we will ask you to fill in some basic details about the mortgage amount and property value and finally your contact details so one of our advisors can get in touch with you today.
We will put you in touch with a mortgage advisor who will ask a few follow up questions and help you get the mortgage you are looking for. Simple.
When applying for a buy to let mortgage, you want to prove to a mortgage advisor that you are a trustworthy and reliable person that can afford to pay monthly mortgage repayments.
If successful with your application, you are given a decision in principle which confirms how much you can borrow and then you can start bidding for properties. We explain what will maximise your chances of getting a buy to let mortgage:
Employment – Most mortgage advisors will require you to be in current employment to be eligible for a buy to let mortgage. You will need to demonstrate proof of employment by showing copies of your payslips and bank statements to the mortgage advisor. Typically those that work in the public sector or who have held a position for a number of years are favoured.
Good credit history – A good credit history confirms that you have paid other mortgages, loans and credit cards successfully in the past and therefore you are low risk of defaulting on mortgage repayments. If you are young and have no credit score, there are specific credit building credit cards you can use to build up your credit rating. We also offer free ways to check your credit score on our website.
Having a big deposit – By having a bigger deposit, it means that you will not need to borrow as much. The best mortgage amounts of 80% are usually limited to those with great credit scores or first time buyers. But by having something like a 50% deposit, means that you only need to borrow 50% from the bank and this is more feasible.
Availability – the property you wish to rent out needs to be available. If you are quick to the market and are able to beat rival bids, you will increase the chances of getting the mortgage for your property.
There also needs to be a demand for rented accommodation in your area. Are you in a student area? Are there working professionals nearby looking for accommodation? Mortgage advisors and providers need to know that your property will be rented out successfully because the income you receive from tenants will help go towards paying your mortgage.
Find a property that will maintain value – Ideally, you want a property which will be filled by tenants and also maintain its value over time. You want to continue to charge rent for the foreseeable future and if you purchase a property in a declining area, you may struggle to find tenants and have to reduce the rent you charge too. Eventually you may want to sell your property so finding a good property in a good area is vital.
To be eligible for a buy to let mortgage, you must be:
At Quiddi, we are pleased to have partnerships with leading mortgage advisors and providers in the UK. Once you apply, you will be in good hands and have access to the best mortgage offers and deals available.