General information for buy to let mortgages
Should you wish to apply for a Buy to Let mortgage with us the information detailed below which applies to both buy-to-let and consumer buy-to-let mortgage applications may be of interest
Name and address
Tipton & Coseley Building Society, 70 Owen Street, Tipton, DY4 8HG.
Purpose of credit
The Society can consider credit for buy-to-let property purchases, remortgages and additional borrowing (including capital raising).
All requests will be subject to our lending policy at the time of application.
The mortgage security (property)
All credit provided by Tipton & Coseley under a CBTL credit agreement or a buy-to-let credit agreement will be secured by a first legal charge over a residential property.
Buy to Let mortgage term
The minimum term for a new Buy to Let mortgage with the Society is 5 years, the maximum term is 35 years.
Our interest rates
The Society has a range of products available, including both fixed and variable rates.
Buy to Let Variable Rate: This is our standard interest rate for Buy to Let mortgages, which can change at any time during the duration of the mortgage.
Discounted Rates: These are linked to the above Buy to Let Variable Rate. Your monthly payment can become cheaper if the rate is reduced, or more expensive if it rises.
Fixed Rates: These rates will remain the same for the duration of your fixed rate period, making it easier for you to know your monthly costs.
A mortgage of £240,000 payable over 21 years on a 2.99% fixed rate to 31 March 2022 and then our BTLVR, currently 5.74% for the remaining term would require an initial payment of £620.28 followed by 37 monthly payments of £600.49 and 214 monthly payments of £1,152.58.
The total amount payable would be £511,189.53 made up of the mortgage amount plus interest (£270,489.53) with a mortgage arrangement fee of £999, a mortgage valuation fee of £400, legal fees of £150, a telegraphic transfer fee of £25 and mortgage exit fees of £125.
The overall cost for comparison is 5.3% APRC representative.
Costs associated with Buy to Let mortgages
Our Tariff of Mortgage Charges will detail any additional costs that may be applicable during the term of your mortgage.
Other costs to consider:
- Obtaining compulsory inventories, gas and electricity safety certificates.
- The cost of any minor repairs required before tenants move in.
- Furnishing costs: you can choose to let your property out with or without furniture, and your rental price will probably reflect this.
- Refurbishment and development costs if you plan to buy a property to improve.
- Letting agents: you may choose to find your tenants with the help of an agency, who will charge for this service.
- Maintenance and repair of the property in the long term.
- Void periods: there may be periods where you don't have a tenant, so your mortgage payments won't be covered by rental income. In order to make sure you can still meet your monthly payments, you should aim to raise rental income of at least 145% of your mortgage payments. Most lenders will require proof of this affordability when considering your application.
- Landlords insurance.
Repayment: Pay off some of the interest on your mortgage, plus the original loan amount, every month. Once your payments have finished, the whole mortgage is paid off.
Interest only: Only pay off the interest on your mortgage each month. You'll need to make other arrangements to pay off the original loan amount that you borrowed, such as savings or an investment plan.
Part and part: A combination of the repayment and interest only method. With this mortgage, when your payments finish, you'll still needs to pay off the remainder of the original loan amount. You will need to make arrangements to pay off this element of the loan, such as a savings or an investment plan.
Your illustration and offer will detail the number, frequency and amount of each payment.
It is possible that after making all your contractual repayments that a small residual balance may remain outstanding at the end of your mortgage term. We will contact you should we require any further payment, although in many instances this will not be required.
Early Repayment Charges
If you wish to repay your loan before the end of your mortgage term you can, however there may be a charge for doing this. Details of the terms and conditions relating to early repayment will be shown in your illustration.
In order for us to consider any new application for a Buy to Let mortgage, a valuation of the property (which will provide security for the credit) will be required.
We are responsible for obtaining the valuation and it is for our sole benefit of assessing the adequacy of the property as security for the loan.
Valuation fees are detailed here.
Your property must be adequately insured, under an acceptable buildings insurance policy.
If you don't repay your mortgage
The loan will be secured over the property. This means that if you are unable to meet your repayment obligations under the mortgage contract we may appoint a 'receiver of rent' or take possession of the property and sell it to repay the debt (after obtaining any necessary court order).