What may be a suitable return for you, may not be seen the same way by a lender.

Typically minimum rental yields are formulaic and driven by two things:

  1. the rate used to calculate the mortgage payment
  2. a percentage over-ride to allow for any rental void or increases in short-term interest rates which might impact your personal finances (these range between 100 – 130%).
Think carefully before securing debt against your home, your home may be repossessed if you do not keep up repayments on your mortgage.