Buy to Let Mortgages In Ireland
Purchasing a home to let is an excellent way to generate some extra income; however, it is easier said than done. Unless you are financially fit enough and have saved enough to purchase a home, you will have to take out a buy to let mortgage, a special type of mortgage loan product designed for those who wish to purchase property just to let it. You can use the income generated in the form of rent to pay off your buy to let mortgage loan.
You can get as much as 90 percent of the current value of your property as buy to let mortgage loans and the loan term can range from five to 25 years, depending on the age of the borrower.
You can get buy to let mortgage in Ireland at variable rates, fixed rates, or split rates. Here is a brief overview of all these rates.
Variable Interest Rate
If you opt for a buy to let mortgage based on variable interest rate, your rate of interest might either decrease or increase depending on the fluctuations created by European Central Bank. If the rates decrease, you stand to benefit; but if the rates increase, you will have to pay higher rates of interest.
Fixed Interest Rate
A fixed interest rate protects you from rate fluctuations in the mortgage market. Irrespective of whether the interest rates increase or decrease, you will have to pay only a fixed interest rate for a specific period of time.
Split Rate
If you get a buy to let mortgage on split rates, you will have to pay off part of your mortgage on fixed rates and part of it on variable rates of interest.
Depending on your personal requirements, you can choose from a wide range of buy to let mortgages such as repayment mortgage, endowment mortgage, interest only mortgage, tracker mortgage, pension mortgage, and so on.
Repayment Mortgage
Also called annuity mortgage, this variety of buy to let mortgage allows you to pay off not only the interest, but also the principal as monthly repayments. While borrowers pay off more interest than principal in the first half of the mortgage term, they pay off more principal than interest during the second half of their mortgage terms.
Tracker Mortgage
Tracker mortgages, which ensure that you won’t be charged more than a specified percentage over the base rate set by the European Bank, are strongly recommended.
Interest Only Mortgages
If you take an interest only mortgage, you will have two monthly payments to deal with — the interest on your mortgage and the premiums on the insurance taken out to pay off the principal. Examples of interest only mortgages include endowment mortgage and pension mortgage.
You can first talk to a reputable mortgage broker to discuss suitable buy to let mortgage plans before finding a property you intend to purchase. You will also have to compulsorily insure your property as well as your life if you want to take out a buy to let mortgage.