What mortgage can I get on a rental home?

Q I am considering buying a second home to rent out as a medium- to long-term investment. I have a £50,000 deposit and do not have a mortgage on my own home. I am looking for a loan of £80,000 for the second property. Am I restricted to buy-to-let mortgages only, or can I utilise other mortgage products which may have better rates to meet my requirements? RE

A No you are not restricted to buy-to-let mortgages. Instead of securing a loan on the second property you could take out a mortgage on your own home, provided it is worth at least £80,000. Doing this is likely to give you access to more competitive interest rates than those available on buy-to-let mortgages. If your home is worth considerably more than £80,000 you will also benefit from better rates because of borrowing a low percentage of the value of your home.

Also, if you were to secure a loan on your own home you would still be able to set the mortgage interest against the rental income from the second property for tax purposes.