A buy to let mortgage is a loan taken out to purchase a property that you intend to rent out to residential tenants. If you rent out a property, you become a landlord with legal responsibilities. Whilst buy to let mortgages often cost more than residential mortgages, landlords hope to make a profit from this form of investment, or to at least break even initially.
Buy to let mortgages in the United Kingdom tend to be interest-only, with the landlord paying the monthly interest using the rental income generated from the tenants. Applicants can apply for a buy to let mortgage for all types of properties including apartments, maisonettes, cottages, bungalows, houses and everything else in between. Plus there are also commercial buy-to-let mortgages for landlords who want to invest in business property.