Best Buy To Let Rates
Why The Best Buy To Let Rates Might Not Be The Best Deals
LTV
The LTV, or loan to value ratio is crucial in trying to get the best deal because it tells you not only how much money you will need in the first place but it also dictates your rate. The best buy to let rates are those that are with the lowest LTVs - simply, the more money you have to put down, so the more of the property that is yours, the lowest the risk you are and the lower the rate. If you need to borrow 75% of the properties worth you are going to be less secure than someone who only needs 50%. So the best buy to let rates are those with the lowest LTVs.
Fees
You need to understand that along with the rate, you will have fees to pay. These can be flexible and can work with your rates, but they have no bearing on the rate. So the best buy to let rates might have huge fees attached - you can either pay more in the first place, or more as you go on in the mortgage. So the best buy to let rates might not be the best mortgages for you, as you will have to pay out more. Couple that with the LTV and you could find yourself with an expensive mortgage, regardless of the rates. So a mortgage cannot just be about the best buy to let rates, it has to be about the whole product.
Mortgage Type
Also, the best buy to let rates differ fundamentally. There are best buy to let rates for tracker mortgages and for fixed mortgages. There are also variable mortgages, discount mortgages and offset mortgages. So even if the best buy to let rates are with fixed mortgages now, they might not be if the Base Rate moves down. And if you have savings an offset might be the best deal in a few years. The best buy to let rates need to be considered long-term, and can never be the basis of a mortgage decision in the here and now.
Term
You also have to think of the length of the mortgage when looking for the best buy to let rates. You may be able to handle a rate now, but what will your situation look like in five years? What about the area you are buying into? Has it got potential? Does the local economy? And even the national economy? These last few months have shown us that nothing is certain, so caution must always be followed. The best buy to let rates might be good today, but you need to be thinking about tomorrow when entering into buy to let.
