Best 2 Year Buy to Let Mortgages

2 year buy to let mortgages

A two year buy to let mortgage can be used to invest in a property that you are going to rent out to someone else. The rates you pay to your lender will not increase or decrease for two years. After the two years are up, you will usually be transferred to the lender’s standard variable rate.

Two year fixed rate mortgages can provide the security of fixed regular payments while still giving you the ability to remortgage after two years.

Fixed rates are great if you want to know exactly what you are paying for a set period. Specifically, in terms of buy to let they can be a great way to manage your costs. Sometimes fixed rates aren't as cheap as the best tracker rates available to landlords, but they do offer the certainty that your payment will not increase for two years.

This will vary from provider to provider, and will depend on your chosen loan-to-value (LTV) and deposit size. However, a two year fixed buy to let mortgage will usually come with higher interest rates than a residential mortgage of the same duration. They may also have higher application fees and often require deposits of at least 20%.

Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice.

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When you apply for a buy to let mortgage, your lender will perform certain checks to make sure you can afford the mortgage before they offer it to you. Their decision will be based on:

1. Your personal finances. This will include your deposit and how much you earn each month. Your credit score will also be checked.
2. Rent. Your lender will check that the rent you intend to charge on your property is greater than your monthly loan repayments. They will usually expect rent to be around 125% to 145% of your monthly payments.

With short-term fixed rates, you should also consider the costs of remortgaging your buy-to-let property regularly. When your fixed rate period comes to an end your mortgage will  usually switch to your lender's buy to let standard variable rate, or possibly a tracker based variable rate. This is likely to be higher than your fixed rate, so if you don't remortgage, it's important you have enough manoeuvre in your budget to absorb the higher mortgage costs. Remortgaging will involve paying new mortgage fees and possibly legal fees if you move to mortgage to a different lender.