People will often take buy to let mortgage payments on interest only to reduce the monthly payment. If you have a period where the property isn’t bringing in an income (rental void) the payment can then be maintained more easily.
Lenders commonly calculate the buy to let mortgage by looking at the rental income you will receive for the property. When buying a property estate agents or letting agents will give you an estimate for the rental income. Additionally lenders will also estimate the rental income to ensure it matches when they carry out their valuation.
When you have buy to let mortgage payments on interest only, you will only pay the interest on the mortgage so the balance won’t change. Some people chose to pay off lump sum payments from their mortgage to bring the balance down. This can be done through the mortgage term or as a lump sum at the end. If you plan to own multiple properties, people will often use the additional funds to save the deposit to buy another house.
You might chose to sell the property at the end of the mortgage, as the property is not your main residential home. Alternatively if you can pay off the mortgage, you will have a higher rental income. You could use this to support your pension income.
Additionally some lenders take in to account your income to boost the affordability for a buy to let mortgage. They will consider your full income and outgoings to look at your mortgage ability.
Below you can calculate how much your buy to let mortgage payment would be for an interest only mortgage.
When looking at your affordability for a buy to let mortgage, you also need to consider the deposit required. click here to look at an estimate for the deposit required to buy a buy to let property.