A buy-to-let mortgage is a product specifically designed for borrowers who are purchasing property to rent out. This could be as investment or as an accidental landlord who has chosen to keep their property due to changes in circumstances but decided to keep ownership of the property.

Buy to let mortgage products require a larger deposit which can be typically from 20% to 25%. This will be dependent on the chosen mortgage product.

With buy to let mortgages the lender will need to ensure the rental income from the property will comfortably cover the mortgage repayments. The majority of lenders will require the rent to be at least 125% of the total repayment. You must therefore think very carefully on the rental yields of the chosen investment property.

It is easy to run up debts in various different places – an overdraft, credit cards, personal loans – all at a higher interest rate than your mortgage. The idea of consolidating debts is to put all your debts in one place with the lowest rate of interest. You can remortgage to increase the size of your mortgage and use the extra money to repay your other debts.

There is a lot to consider before you decide to proceed with consolidation because there are downsides:

although the interest rate may be lower, you’ll be paying off your remortgage for many years to come, including the amount you have added for your other loans. It can help you out of today’s difficulties but you will pay more in the long run.

Your remortgage is secured against your property so, if you fail to keep up the remortgage payments, you could be repossessed and lose your home as opposed to a personal loan or credit card.

Always take advice before consolidating your debts. Our specialist advisers are on hand to talk further with you.