Are Buy To Let mortgages cheaper than residential? It’s always good to begin articles on property with notes of caution. When considering whether Buy To Let mortgages are cheaper than residential you should first think of the bigger picture. In a recent opinion piece the eminent Irish economic commentator David McWilliams predicted that ‘Ireland again faces a global property cycle fallout’. [McWilliams was one of the few who urged caution in advance of the 2008 economic meltdown].
So, if you are considering buying Buy To Let, do so with both eyes open. Be aware of the risk. But consider the plus side as well. As an investment, bricks and mortar have done better than stocks and shares since World War 2. Ireland is in very good economic shape with, for example, the IDA showing continuing job creation figures. And those employees need somewhere to live; so buy–to –let is certainly an investment option.
Are Buy To Let mortgages cheaper than residential?
Buy To Let mortgages are typically about one percentage point more expensive than residential mortgages. One the main reason for this is that banks consider tenants as bigger risks than owner occupiers. In addition, some Buy To Let mortgages will have high arrangement fees, as much as 0.5% on the loan amount
Higher deposit. The minimum deposit is usually 30% of the property’s value – although in some circumstances it can be as high as 40%. First time buyer – If you are living at home and consider that buying an apartment to let is a smart investment to make, you need to take into account that you will lose your first-time buyer status. You are a first-time buyer only once. If you choose to make your first purchase a Buy To Let, you cannot later go back to claim first-time buyer status on a subsequent purchase.
Dave McWilliams article