A Buy to Let mortgage is a loan which allows a borrower to purchase a house to rent out rather than live in. Until relatively recently, this type of borrowing was very rare because lenders tended to regard it as a commercial arrangement and would charge much higher fees and rates of interest. Today, things have changed with a relaxation of lending criteria and many more products are available on the market.

Although the owner-occupier housing market is showing signs of quieting down, the popularity of property as an investment grows. Buy to Let mortgages have grown in popularity over the last few years and now account for 1 in every 15 mortgages in the UK.

Buying residential property to let has become an increasingly popular investment choice. This is hardly surprising, given the recent upward surge in the property market. Buying to let allows you to borrow the lion's share of the property value, but you then keep the growth in the value of the whole property - not just your deposit. This process is known as 'gearing' and is the key to the attractiveness of buying to let.

Most people buying to let will need to take out a specialist mortgage. You will also need to put down a reasonable deposit - most lenders in this market will require at least 15% as a downpayment, although many lenders are now asking for up to 30%.

If you have substantial equity in your own home, you may be able to look at remortgaging this and so obtain the funds to take out a small buy-to-let mortgage.

Because of the higher risks involved with letting out a property, buy-to-let mortgages are more expensive, although deals do vary. Whilst you can expect to pay more than for your own residence, there are some very competitive fixed and discounted buy-to-let offers around.

When considering if you can afford a Buy to Let mortgage, it is important to look at factors such as future interest rate rises, maintenance costs and other fees you might incur, such as Letting Agent Fees as these will all have an impact on your profit margin. You also need to consider the area where you are buying and do some research to find out how much other similar rental properties charge.

Lenders take different approaches. Some will base the mortgage on your income in addition to the amount of rent they estimate can be obtained.

Some lenders will base the loan purely on the expected rental. The formula they use will also vary. Typically a lender will require the rent to be at least 130% of the mortgage payment. Others will offer a three times' salary multiple and half the rental income.

Some new lenders in the market place will allow self certification on the basis that property prices are that much higher these days that income from the rent sometimes does not cover the mortgage payments.

The overall cost for comparison is 6.8% APR

This is intended as a guide only - other criteria may apply, and we can advise on any special terms and conditions which your selected lender may wish to impose at the time of application.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.