The best 85% Buy to Let Mortgages?
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Some of the Best 85% Buy to Let purchase Mortgages products available, are a phone call away.
The Best 85% Buy to Let Mortgages for you will depend on your circumstances. Some property investors prefer competitive fixed rate so that they know what their outgoings will be; for others, the lowest rate is the most important for their yield.
We've searched and identified for you all the 85% Buy to Let mortgage deal from the mortgage market.
If you want a low deposit buy to let mortgage of 15% deposit with competitive rate of interest. We can help you invest in property today.
These 85% BTL Mortgages include Fixed Rate or Discount Rate Mortgages with an introductory rate of two or three years.
With an 85% Buy To Let Mortgage - If the BTL property will cost £200,00 you can borrow £170,000. This would mean you have to pay £30,000 deposit out of your own savings.
for 36 months.
for 24 months.
for 36 months.
for 24 months.
for 24 months.
The first challenge is finding a buy to let mortgage lender that offers 85% LTV Mortgages. They are not common.
At the time of writing, there is only one lender offering mortgages with just 15% deposit.
This lender also has limited distribution which means not all mortgage brokers are able to offer the product.
Typically the higher the Loan to Value (LTV) the higher the mortgage rates you will pay, due to the higher risk for the mortgage lender.
With a deposit for Buy to Let with just 15% deposit this is no different.
An extra 5%-10% deposit can go a long way in decreasing the mortgage rates thus increasing your rental yield.
85% Buy to Let Mortgage Products are useful for two types of investors.
The most obvious; if you have a small deposit available to make a property purchase. The higher the Loan to Value the less you have to find.
The other; is if you have a larger sum of funds but you wish to split it across many BTL Investments. This is a Buy to Let Investment strategy called leveraging.
Levering is the belief in buying more properties by using borrowed funds. Assuming that the rental income form the property or property value appreciation will be more than the cost of borrowing.
In both examples, having a 15% deposit you will pay a higher rate than a different landlord with 20% deposit.
You can get 85% Buy to Let Mortgages for Limited Companies.
The mortgage is for Special Purpose Vehicles (SPV) and not trading companies. You can set up an SPV for under £20 (ask us how!).
You will pay higher rate for properties in a Limited Company with just 15% Deposit.
These Limited Company products are available on repayment or interest-only terms.
This include purchasing a Buy to Let in a Limited Company and remortgaging a Buy to Let in a Limited Company.
You can purchase or remortgage a House of Multiple Occupation (HMO) in a Limited Company.
Limited Company Mortgages need skilled mortgage brokers who understand every aspect of their field and with us, that is what you will get.
You can get 85% LTV Buy to Let Mortgages for House of Multiple Occupation (HMO).
If you have three or more paying tenants who form one or more household in the property.
You can get a HMO Mortgage in your personal name or via a Limited Company.
These HMO products are available on repayment or interest-only terms.
You can purchase a HMO with this mortgage product or remortgage your HMO.
HMO Mortgages are limited to a maximum of eight bedrooms for inexerianced HMO Landlords. Landlords with HMO experience no overall limit.
HMO Mortgages need skilled mortgage brokers who understand every aspect of their field and with us, that is what you will get.
As we mentioned an 85% Buy-to-Let Mortgage will mean a higher mortgage rate. You will also have to meet a higher Rental Cover and be cautious of the risk of Negative Equity:
With a higher loan, you will also have higher Rental Cover threshold.
The higher the mortgage payments you have to make the higher the rent you have to be able to prove to be able to achieve.
Buy to Let lenders typically want rent to cover at 125% of the mortgage repayments, with a notional pay rate of 5%.
If at mortgage of 85% LTV is a loan of £85,000 you will need for instance £442 per month rent. . (Formula: ((£85000/12)*5%)*125% )
If at mortgage of 80% LTV is a loan of £80,000 you will need for instance £416 per month rent. (Formula: ((£80000/12)*5%)*125% )
With just 15% of the value of the property as a buffer in falling house prices, there is a risk of Negative Equity.
Negative Equity is a situation of which you owe more in mortgage debt than the property is worth.
In this instance for example it can happen if house prices fall by 15% in your area OR you overpay the purchase price.