Guide to Buy to Let mortgages

What you need to know before borrowing

If you require a Buy to Let mortgage please fill in this form

The essential Buy to Let mortgage guide

There are a few things to understand in relation to buy to let mortgages but you must also be aware that the essential idea behind them is that they function in much the same way as a regular mortgage. However, perhaps the main difference between the two is that a buy to let mortgage will typically offer higher rates than a regular mortgage, with the difference usually being around 0.5%. This, however, is not a problem to most people as they should have sufficient plans in place to make money from renting their property out to tenants.

Another way in which buy to let mortgages differ from regular mortgages is in the amount of equity you will need to initially have – i.e. the amount of money that you will be able to borrow. Whilst in regular mortgages the amount you can borrow is usually around 90% of the overall value, with buy to let mortgages this is usually closer to 75%, even with the best buy to let mortgages UK lenders can provide. As well as this, the fees will also usually be higher, coming in at up to 3.5% of the mortgage amount.

Although there are a few things that make buy to let mortgages more expensive than regular ones, this is more than balanced out by the fact that they offer great potential to generate an extra income stream or become an investment. Money is usually made in two different ways when it comes to buy to let mortgages – either through renting out the property to tenants or by allowing the value of the property to build up over time. There are risks though – not finding tenants can be costly and also house prices have been known to drop instead of rise. With the housing market looking uncertain at the moment, people should certainly see a buy to let mortgage as something that will make money through renting and not necessarily through the value of the home going up – unless they are planning a long term investment.

Perhaps the best way to ensure that you get the best deal on any buy to let mortgage is to use a broker, as they have all the experience needed in order to find you the best deals out there. There are a number of them who are experienced specifically in the buy to let market and they will be able to guide you through all of the hurdles that this process can have. In the end though you will have a property that you can make money from and yet another way to see yourself through the financial hardships that this country is currently in. After all, there has never been a time when more people are opting to rent their home instead of buying!


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Frequently Asked Questions


How much can I borrow?    

The maximum LTV on a Buy To Let mortgage is 85% but this will depend on location and what the rental yields are (e.g. in central London you can borrow a lot less due to the low yields). How much you can borrow is determined by the rental income on your property and generally it must be at least 120% of your mortgage repayments.

Can I get a BTL mortgage if I have bad credit?    

Your credit history is very important for a BTL mortgage. Some adverse credit is acceptable but if it’s too much then we would not be able to help

Can I get a BTL mortgage if I am a first time landlord?    

Yes, though the range of options available to you may be limited.

Can I get a BTL mortgage if I live overseas?    

Yes. There are a range of options available now to overseas buyers.

Do I need to have an income other than the rental income?    

No, not necessarily though it will help you get better deals if you do.

Can I get a mortgage for a HMO (House of Multiple Occupancy)?    

Yes, though there are some restrictions on LTVs.

What will it cost to arrange a BTL mortgage?    

This depends on how complex the case is but it will be made clear to you in advance before you pay a penny.


What is needed to apply

Applying for a Buy To Let Mortagage is very easy. Below are listed the things you need in order to apply.

  • Eligibility CriteriaClean credit and experience as landlord are big advantages, especially for higher LTV loans. Sufficient income from the property as well as personal income also required.
  • Documents RequiredProof of ownership, income and ID as well as an application form.
  • Additional CommentsThe process takes about 4-6 weeks from start to finish.

Many of the High Street banks will provide Buy to Let mortgages and very often they are the best place to go. But rather than just taking the first offer from you personal bank, it may serve you to look around the market and see if there is a more suitable deal out there. This is where we can assist by getting an expert broker to look at you case and see what the options are. As we charge no fee unless the loan completes, we hope you'll agree this is worthwhile for you to do. Call us on 01494 410 125

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