Buy to Let Mortgage

Buy-to-let (BTL) mortgages are for landlords who buy property to rent it out. The rules around buy-to-let mortgages are similar to those around regular mortgages, but there are some key differences.

Typical Buy-to-let lender questions:

  • Investing in houses or flats?
  • Whether you can afford to take the risk
  • Do you have a good credit record?
  • Are you stretched too much on your other borrowings?

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Frequently Asked Questions

You need to earn at least £25,000 a year, otherwise you might struggle to get a lender to approve your buy-to-let mortgage.

Most lenders have upper age limits, typically between 70 or 75. This is the oldest you can be when the mortgage ends not when it starts. So if you’re 45 when you take out a 25-year mortgage it will finish when you’re 70.

  • The fees tend to be much higher.
  • Interest rates on buy-to-let mortgages are usually higher.
  • The minimum deposit for a buy-to-let mortgage is usually 25% of the property’s value (although it can vary between 20-40%).

The maximum you can borrow is linked to the amount of rental income you expect to receive. Lenders typically need the rental income to be 25–30% higher than your mortgage payment.
To find out what your rent might be, talk to local letting agents, or check the local press and online to find out how much similar properties are rented for.

It’s a good idea to talk to a mortgage broker before you take out any buy-to-let mortgage, as they will help you choose the most suitable deal for you.

Plan for times when there’s no rent coming in – don’t assume your property will always have tenants. There will almost certainly be times when the property is unoccupied or rent isn’t paid, and you’ll need to have the financial reserves to meet your mortgage payments.
You might also need savings for major repair bills. For example, the boiler might break down, or there might be a blocked drain.
If you’re considering making a buy-to-let investment, talk to us to get specialist advice and to clearly see all of your options.

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