Best Buy To Let Mortgage

Mortgages on buy to let property are very similar to a mortgage on your home, but there are some key differences:

• Income assessment
  Buy to let mortgages are assessed primarily on the rent you are charging. The rent you charge must typically be 125% of the mortgage payment (so for a mortgage payment of £800, you’ll need to be charging rent in the region of £1,000 per month). Some lenders also have a minimum income requirement as well, to give them some assurance you could meet mortgage payments during untenanted periods.
• Interest rates
  Rates on buy to let mortgage deals will be higher than on similar deals for your own home.
• Deposit
  The amount of money that you need to put up can be higher for a buy to let mortgage. While for a mortgage on your own home you might be able to access a deal requiring a 10% deposit, buy to let mortgages require a minimum of 20%. In keeping with a mortgage on your own home, the very top rates are reserved for borrowers who can stump up a deposit of 30-40%.
• High fees
  Buy to let mortgages generally charge higher arrangement fees – for a loan of £100,000, fees can range from £1,000 to £3,500. With such variance it’s well worth shopping around, as well as enlisting the help of a good BTL mortgage adviser. It can often be the case that a mortgage with a lower rate can work out more expensive if the arrangement fees are high.
• Age
  Unlike a normal mortgage, you may be able to secure a buy to let mortgage way beyond your retirement age. This is because buy to let mortgages are usually assessed using the rental income you receive. If you’re thinking of keeping a buy to let into retirement be sure that you’ve considered that managing a property will be work, even if you employ a letting agent. As well, consider the effect that any untenanted periods will have on your finances, particularly as your income is likely to be reduced after giving up work.

Buy to let is an investment

Buy to let is a form of property investment. As such, you have the potential to lose money as well as to make it.

Unlike other forms of investment, buy to let is often “leveraged” or part financed by borrowing through a buy to let mortgage. While this gives the opportunity to make big gains if property prices go up, it can exacerbate your losses if property prices go down.

Read our buy to let investment risk guide

Buy to let mortgage advice

Mortgage advice can be particularly important in the context of buy to let. An experienced adviser will have the in-depth market knowledge to help you find the most suitable mortgage.

We've partnered with a team of friendly and hugely experienced mortgage advisers who are on hand to help with your decision. Simply request a callback and someone will be in touch shortly. Our mortgage advice service is available if you need to borrow from £50,000, up to 80% of your property’s value.

What next?

Speak to a BTL mortgage adviser
Compare 2 year fixed BTL mortgages
Compare 3 year fixed BTL mortgages
Compare tracker rate BTL mortgages
Compare BTL mortgages for new landlords

Buy to let guides