Buy to Let Mortgages
- Access to competitive rates and some you can't get direct
- Specialist Mortgage Advisers
- Free initial consultation
What's On This Page?
Your home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages.
Get In Touch
Buy to Let Mortgages Explained
If you’re thinking about investing in property, you’ve probably come across the term Buy to Let mortgage. But how do they work, who can get one, and what should you consider before becoming a landlord?
Here’s everything you need to know.
What is a Buy to Let Mortgage?
A Buy to Let mortgage is a mortgage designed for a property that you intend to rent out to tenants rather than live in yourself.
Unlike a residential mortgage, where affordability is mainly based on your personal income, a Buy to Let mortgage is primarily assessed on the rental income the property is expected to generate.
Most Buy to Let mortgages are considered business transactions and are not regulated by the Financial Conduct Authority (FCA), although some types of Consumer Buy to Let mortgages may be regulated.
Who Can Get a Buy to Let Mortgage?
Many lenders will consider Buy to Let applications if you:
- Are at least 18 years old
- Meet the lender’s credit and affordability requirements
- Have an appropriate deposit available
- Can demonstrate that the property is likely to generate sufficient rental income
You don’t necessarily need to own your own home first. Some lenders offer Buy to Let mortgages to first-time buyers, although the criteria may be more restrictive.
You can purchase a Buy to Let property:
- In your personal name
- Jointly with another person
- Through a partnership
- Through a limited company
The most suitable ownership structure will depend on your circumstances, so it’s always worth obtaining independent tax advice before proceeding.
How Much Deposit Do You Need?
Typically, lenders require a minimum deposit of 25% of the property’s value.
This means most Buy to Let mortgages are offered at up to 75% Loan to Value (LTV).
In certain circumstances, some lenders may offer up to 80% or even 85% LTV, although these products are less common and often subject to stricter criteria.
How Much Can You Borrow?
Buy to Let borrowing is usually based on the property’s expected rental income.
Lenders assess whether the rent will comfortably cover the mortgage payments by using what’s known as an Interest Cover Ratio (ICR).
Different lenders have different requirements, which can significantly affect how much you can borrow.
A mortgage adviser can help identify lenders whose criteria best match your circumstances and investment goals.
What Costs Should You Budget For?
As well as the property purchase price, there are several other costs to consider:
- Deposit
- Solicitor and conveyancing fees
- Mortgage arrangement fees (where applicable)
- Property valuation fees
- Stamp Duty Land Tax
- Landlord insurance
- Letting agent fees (if applicable)
- Maintenance and repair costs
- Potential periods where the property is vacant
Understanding the full cost of ownership is important when assessing whether a Buy to Let investment is right for you.
Can You Live in a Buy to Let Property?
In short, no.
A Buy to Let mortgage is designed for properties that will be rented to tenants. Living in a property financed by a Buy to Let mortgage would normally breach the terms and conditions of the mortgage.
If your circumstances change and you need to move into the property, you should speak to your lender before doing so.
Similarly, if you own a residential property and later decide to rent it out, you should obtain your lender’s consent before letting the property.
Interest Only or Repayment?
Many landlords choose an interest-only mortgage because the monthly payments are typically lower.
However, there is no one-size-fits-all solution.
The most suitable option will depend on your investment objectives, budget and long-term plans. Some landlords prefer repayment mortgages to reduce their outstanding borrowing over time, while others prefer the flexibility of interest-only arrangements.
A qualified mortgage adviser can help you explore the pros and cons of each approach.
How Many Buy to Let Properties Can You Own?
There is no standard limit.
Some lenders restrict:
- The number of properties you can own
- The number of Buy to Let mortgages you can hold with them
- The overall level of borrowing across your portfolio
Other lenders specialise in portfolio landlords and may support larger property investments.
Whatever your experience level, there are usually lenders available to suit your circumstances.
Speak To an Expert
Our job is to provide you with the expertise and knowledge to find you the most appropriate solution. Whether you’re investing in property or looking to buy your first home, our mortgage advisers can help.
Important Changes for Landlords: Renters’ Rights Act
The Renters’ Rights Act introduced significant changes to the private rental sector in England that landlords should be aware of.
Key changes include:
Assured Periodic Tenancies
Most residential tenancies are now Assured Periodic Tenancies, which operate on a rolling basis rather than having a fixed end date.
Changes to Possession Rules
Section 21 “no fault” evictions have been abolished. Landlords must now rely on specific legal grounds if they wish to regain possession of their property.
Pet Requests
Tenants can request permission to keep pets, and landlords must consider these requests fairly and cannot unreasonably refuse them.
Rent Increases
Rent increases can generally only be implemented through the prescribed legal process and not more than once annually. Tenants may challenge rent increases they believe exceed market levels.
Rental Bidding Restrictions
Landlords and letting agents must advertise a clear asking rent and cannot encourage or accept bids above the advertised amount.
Landlords should always ensure they understand their legal responsibilities and seek professional advice where necessary.
How Can a Mortgage Adviser Help?
A Buy to Let purchase involves more than simply finding a mortgage.
At Fort Advice Bureau, we can help you:
- Understand your borrowing options
- Compare lenders and products
- Navigate lender criteria
- Explore limited company and personal ownership options
- Understand affordability calculations
- Find specialist solutions for portfolio landlords, holiday lets and more complex purchases
Whether you’re buying your first investment property or expanding an existing portfolio, we’ll help guide you through the process from start to finish.
Speak to a Buy to Let Expert
Thinking about investing in property?
Our experienced mortgage advisers can help you understand your options and find a mortgage solution tailored to your circumstances and long-term goals.
Get in touch with Fort Advice Bureau today for expert Buy to Let mortgage advice.
Important Information
Your property may be repossessed if you do not keep up repayments on your mortgage.
Most Buy to Let mortgages are not regulated by the Financial Conduct Authority. Some Consumer Buy to Let mortgages may be regulated.
Tax treatment depends on individual circumstances and may be subject to change in the future.
The value of property investments and any rental income received can go down as well as up, and you may not get back the amount originally invested.
Why Choose Fort Advice Bureau LTD?
- Our experienced Management Team has over 50 year's worth of combined knowledge in the mortgage industry.
- We can quickly assess your needs and compare the most suitable products to find you the most suitable deal.
- With an honest, transparent and consultative approach, we are 100 per cent focused on delivering a first-class service every step of the way.
- We build strong, long-lasting relationships with lenders and are not reliant on a computer-generated response.