Call 020 8979 9684
Quick Application

Buy to Let Mortgage UK

Our buy-to-let mortgage advice services

Contact us now for advice from a mortgage expert and assistance with buy-to-let mortgage application – we consider the whole of the buy-to-let market to get you the best mortgage arrangement possible.

We specialise in:

  • First-time buyers and first-time landlord mortgages
  • Mortgages for Multiple Occupancy
  • Mortgages for Student Lets
  • Mortgages for Benefits tenants

Today’s best buy-to-let mortgages UK

1.51%Buy to Let75%first landlord purchase
1.59%Buy to Let75%no minimum earned income
5.34%Buy to Let85%only 15% deposit

A buy-to-let mortgage is a mortgage arrangement specifically designed for lending on a property that you intend to rent out.

It is not designed to be used on a property that you intend to live in, nor should it be taken out with that intention in mind.

You cannot use a buy-to-let mortgage to buy a property in which a member of your family will be living, and the lender will always check this condition during the application process.

Frequently Asked Questions

What is the criteria for a buy-to-let mortgage?

Buy-to-let mortgages are typically underwritten based on the rental income of the property. Calculations vary between lenders, but for most, £1,000 per month of rent will support £159,000 of mortgage borrowing.

How much rent do I need for a buy-to-let mortgage?

Since buy-to-let mortgages are underwritten based on rental income, your rent is the key factor to arrange a mortgage. Expect to require £1,000 rent to support £159,000 of lending.

How much would a £100,000 buy-to-let mortgage cost?

In today’s market, most mainstream mortgage lenders will provide for a buy-to-let mortgage of £100,000 at an interest cost of some £250 a month.

Can you rent to a family member under a buy-to-let mortgage?

On a standard buy-to-let mortgage, you cannot rent to a family member. There are, however, regulated buy-to-let mortgages that will allow you to rent to a family member. Speak to your mortgage broker for further information.

Can you remortgage on a buy-to-let?

Yes, you can remortgage a buy-to-let similarly as you would any other property.

How easy is it to remortgage a buy-to-let?

It is easy to remortgage a buy-to-let provided the security property values up, and the rental income is sufficient.

How soon can you remortgage a buy-to-let?

You can remortgage a buy-to-let from day one, but many lenders require that you have owned the property for at least six months before they will consider a remortgage. If you are remortgaging within those first six months, expect the lender to consider the maximum value to be no more than the original purchase price.

Can you get a 90% buy-to-let mortgage?

No, in the current market, 90% buy-to-let mortgages are not available. Occasionally, a lender may offer an 85% or 80% buy-to-let mortgage, but 75% is the standard.

What happens if you rent out a property without a buy-to-let mortgage?

If you rent out the property that you own with the residential mortgage, you will be contravening the terms of the mortgage. Technically, the lender can repossess for such a contravention. Most residential lenders, if requested, will provide consent to let.

Can I buy my parents’ house with no deposit?

Yes, you can buy your parents’ house with no deposit. Lenders call this a concessionary purchase, but you are best using a broker to raise the funding as only set lenders are suitable to use in these circumstances.

Can I buy a property to rent to my parents?

Yes, you can buy property to rent to your parents but not under a standard buy-to-let mortgage. You would need a regulated buy-to-let mortgage, and for this, you are best speaking to a mortgage broker.

Is it possible to get a mortgage without a deposit?

No, you will typically need a 25% deposit to arrange a buy-to-let mortgage.

Buy-to-let mortgages and legislation

While a buy-to-let mortgage is similar to a residential mortgage in that it is a loan secured on a property, how they are underwritten and regulated is entirely different.

A buy-to-let mortgage arrangement is not a regulated product and therefore advice and arrangement of these mortgages is not covered under legislation. This means that many mortgage brokers operating in this area are not regulated or controlled by any statutory authority and are not obliged to give you any specific advice, recommendation or information on your lending plans.

Use a mortgage broker to arrange a buy-to-let mortgage

If you are arranging a buy-to-let mortgage, it is probably worth doing it via a broker who also does residential mortgages as most of these will handle your buy-to-let mortgage in the same way that they would a regulated contract, and still provide you with a full mortgage illustration and advice with recommendation.

How a buy-to-let mortgage is underwritten

A buy-to-let mortgage is a loan to be used to generate a profit. It is therefore a business transaction. When underwriting, the lender is concerned with the level of rent you can expect to achieve on the property, against how much interest you are being asked to pay.

Typically, a lender will look for the monthly rent to exceed the mortgage pay rate by one quarter, for example, one thousand pounds per month in mortgage payments would need an assessable rent of one thousand two hundred and fifty pounds per month.

Buy-to-let mortgages are normally set up on an interest-only basis as this is more advantageous for most property owners when it comes to completing their tax returns. Lenders will generally ask for a little more deposit on a buy-to-let mortgage than in the residential market and the rule of thumb is a minimum of twenty-five per cent.

Although the lender does not directly underwrite the mortgage against the applicant’s personal income, most now require the applicant to have a minimum personal income level and this is typically twenty-five thousand pounds per annum. Lenders are understandably cautious about lending to applicants who derive their income from property development as a buy-to-let lender is not comfortable with their funds being used to fund development projects.

Buy-to-let mortgages and tenancy options

Properties are rented on a number of different basis in the UK, the most common of which is the assured shorthold tenancy where the tenant is an individual, a couple or a family. The assured shorthold tenancy is acceptable to all buy-to-let mortgage lenders.

Other types of tenants can be attractive to landlords as they generate more income. Examples of this, common in university towns, are student lets where a number of students will be living in one house. Other properties may be on a multiple occupancy basis where people rent on a room-by-room arrangement. These kinds of letting scenarios are not acceptable to all lenders, and you will need specialist advice from your mortgage broker to arrange lending on these types of properties.

Similarly, if you are buying the property as a limited company, this is not acceptable to all lenders, and again, you will require specialist advice.

Finding the right mortgage broker for buy-to-let mortgages in the UK

If you intend to buy a property in order to let it and generate profit, please remember that like all business projects, it makes sense to get the right advice at the outset. The best place for that advice is via a mortgage broker. If you can find a mortgage broker that runs their own buy-to-let portfolio and understands the market in-depth, you will be talking to the right individual.