Mortgages for First Time Landlords

Changing your mortgage to a buy-to-let mortgage

Buy-to-let, for some, is something that’s fallen into rather than planned. If you’ve decided to move in with your partner, or have to move away for work you may be considering keeping your home, but having tenants move in.

But how exactly do you change your existing mortgage into a buy-to-let? The first thing we should say is:

Don’t move tenants in without formal permission from your mortgage lender. There’s a process to follow.

5 steps to becoming a BTL landlord

1. Speak to your mortgage lender

If you already have a mortgage on your property, but wish to convert it to buy-to-let it’s important to speak to your mortgage lender. You’re not allowed to move tenants into your property without your lender granting what is known as “consent to let”.

There will be a fee charged for getting consent. It could be the case that you are allowed to remain on the same mortgage rate that you are currently on, but it’s more likely that you will have to go onto a specific buy-to-let mortgage rate.

If this is the case, it’s worth seeing what your existing lender can offer and compare this to other mortgages for first time landlords (you might find that speaking to a mortgage broker will also be of help).

2. Are you going to manage your buy-to-let?

If you’re not confident managing your property and tenants directly, a letting agent can be a great help. Be sure to get quotes from several agents for managing your property, but when it comes down to it, it’s the agent you feel most comfortable with, not price that’s most important.

A letting agent has that specialist knowledge that can help you get your property ready to rent, making sure you have your Gas safe gas inspections up to date as well as looking at the details, such as making sure any electrical appliances you leave for the use of tenants are PAT tested.

It’s always better to go for a letting agent that’s a member of the Association of Residential Letting Agents (ARLA): see www.arla.co.uk. ARLA members have to adhere to certain professional standards, as well as following a strict code of practice.

3. Don’t forget landlord insurance

When you become a landlord you need to have specialist landlord insurance on the property, not the buildings insurance you’d normally have.

4. Consider talking to an accountant

Buy-to-let is an investment, and you will have to pay taxes regarding the property that you may not have thought about. Consider talking to an accountant or tax professional about what you might have to pay (your letting agent may be able to put you in touch with a specialist in this field).

5. Are you happy with the investment risks?

Bricks and mortar is normally considered a safe bet, but a buy-to-let property is an investment. That means that you could lose money as well as make it. To start off read our guide to buy-to-let investment risks. If you’re still unsure, speak to a financial adviser.

What next?

Speak to a BTL mortgage adviser

Compare all BTL mortgages

Compare 2 year fixed BTL mortgages

Compare 3 year fixed BTL mortgages

Compare 5 year fixed BTL mortgages

Compare tracker rate BTL mortgages

Read our buy-to-let guides