What is a buy-to-let mortgage?
Definition of a buy-to-let mortgage
A buy-to-let (BTL) mortgage is a type of secured loan issued by a financial institution to individuals for the purposes of buying property that will subsequently be let to tenants.
Similar to a residential mortgage, a buy-to-let mortgage requires the borrower to pay a percentage of the cost of the property as a deposit. The remaining cost is then covered by the BTL mortgage, which the borrower repays over an agreed period of time.
The interest rates applied to BTL mortgage repayments tend to be higher than those applied to repayments of residential mortgages.
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