Interest rates can be higher, as previously mentioned, and fees can be higher too. The flipside to this is that most buy-to-let mortgages are interest only, so they can be much more manageable for investors. You should still be aware though, that at the end of the mortgage term, the capital will still have to be repaid in full. In addition, it is common for the minimum deposit required for a buy-to-let mortgage to be higher than for a personal mortgage – on average you can expect to put down approximately a quarter of the property’s value; sometimes more.
When looking at the figures and projecting your rental income, it’s wise to consider that there may also be periods when your property is unlet. We can discuss your overall financial plan with you to ensure that you are covered during these periods. It’s also worth considering that the housing market can be predicted, but is not guaranteed – do you have a contingency plan for if house prices were to fall at the time you were looking to sell and repay your buy-to-let mortgage?
Finally, it’s important to consider the tax implications. If you were to sell your buy-to let property and make a profit (which presumably, you would like to), you will then be faced with Capital Gains Tax if the profit exceeds the annual Capital Gains Tax threshold.