Your Trusted Buy-To-Let Mortgage Advisor

The amount you can borrow on a Buy to Let mortgage depends on several factors, including the expected rental income of the property, your personal income, your creditworthiness loan to value and interest rate. Generally, lenders will require the rental income to cover at least 125% of the mortgage payment for lower rate tax payers/limited companies and 145% for higher rate taxpayers. Typically, you can borrow 75% to 80% of the property’s value, but this can vary depending on the lender and your individual circumstances.

The deposit you’ll need for a buy-to-let mortgage will typically be higher than for a standard residential mortgage. Lenders will usually require a deposit of 25% of the property’s value, although some may accept a smaller deposit. Keep in mind that the larger the deposit you can put down, the better the interest rate you may be able to secure.

In most cases, if you are a private landlord and renting a property that will be your tenants’ home, then you’re likely to need an Assured Shorthold Tenancy (AST). When applying for a Buy to Let mortgage, the mortgage lender will insist that you have an AST and may ask to see a copy. There’s more information about tenancy agreements on the GOV.UK website.

When applying for a buy-to-let mortgage, it’s important to choose a rental property that is likely to be a safe investment, and mortgage lenders will also consider factors such as the location and condition of the property. However, lenders may also have general restrictions on certain types of property, such as new build flats, ex-local authority properties, high-rise flats, flats above commercial premises, and holiday homes. These restrictions may include requiring a larger deposit or limiting the number of floors in the building. It’s important to note that these are just examples, and our mortgage advisor can help identify which lenders are more likely to approve a mortgage for a specific type of property.

A buy-to-let mortgage is specifically designed for those who want to purchase a property with the intention of renting it out to tenants, whereas a residential mortgage is designed for those who want to buy a property to live in themselves. The main difference is that buy-to-let mortgages typically come with higher interest rates and require a larger deposit, as lenders consider them to be a higher risk investment. Additionally, buy-to-let mortgages often have different affordability criteria and lenders may consider the potential rental income when determining the amount that can be borrowed. Buy to Let mortgages are mainly non-regulated but there are some exceptions where they are deemed to be regulated in certain situations.

The interest rates for a buy-to-let mortgage can vary depending on a number of factors, including the deposit size, the type of property being purchased, the rental income potential, and the borrower’s credit score. Generally speaking, buy-to-let mortgages tend to have higher interest rates than residential mortgages, and lenders may also charge arrangement fees and other associated costs. Our advisors are always available to assist you in finding the most suitable deal for your unique situation.

Yes, it is possible to get a buy-to-let mortgage as a first-time buyer, but it can be more challenging. As a first-time buyer lenders may view you as a higher risk and will also base their lending decision on both rental income and your own personal affordability. However, if you have a good credit score, a stable income, and a solid business plan for your rental property, you may be able to secure a buy-to-let mortgage. It’s important to shop around and compare different lenders to find the best deal for your individual circumstances which is why contacting a mortgage broker for the right advice is a good solution.

At the end of your interest-only buy-to-let mortgage, you will be required to repay the full amount borrowed including any fees that were added to the mortgage on completion. This can be done in several ways, such as selling the property, using savings or investments, or refinancing the mortgage. If you choose to refinance, you will need to apply for a new mortgage, and the lender will assess your ability to repay the loan based on your income and credit score. It’s important to plan ahead and have a clear repayment strategy in place to avoid any financial difficulties at the end of the mortgage term.

There is no limit to the number of buy-to-let mortgages you can have. However, the number of mortgages you can obtain is subject to certain conditions and criteria. However, some lenders have their own restrictions on how many mortgaged buy to let properties you can have with them or restrict the maximum loan to value. It’s worth noting that having multiple buy-to-let mortgages can be a complex and risky venture, so it’s important to seek professional advice before making any investment decisions. As with any financial investment, it’s crucial to carefully consider the risks and rewards before committing your money.

There are several reasons why a buy-to-let mortgage application in the UK might be declined.

Here are a few common reasons:

Insufficient income: Lenders will typically require you to have a minimum level of personal income in order to qualify for a mortgage plus the rental income would need to pass their stress rates. If you don’t meet their criteria, your application may be declined.

Poor credit history: Your credit score and history play a crucial role in the lender’s decision-making process. If you have a history of missed payments, defaults or bankruptcy, this could impact your chances of being approved for a mortgage.

Property doesn’t meet lender’s criteria: Each lender has their own criteria for the type of property they are willing to lend on. If the property you are looking to purchase doesn’t meet their criteria, your application may be declined for example properties adjacent or above commercial premises, properties of non-standard construction, properties that need significant refurbishment etc.

Existing debt: If you have significant debt, this could impact your chances of being approved for a mortgage, as it affects your debt-to-income ratio.

Too many existing mortgages: Some lenders may have a limit on the number of properties they will lend on to a single borrower. If you already have too many mortgages, your application may be declined.

It’s important to work with a mortgage advisor who can help you understand the lender’s criteria and guide you through the application process. They can also help you identify potential issues with your application and advise you on how to improve your chances of being approved.

No, you cannot live in a house with a buy-to-let mortgage. The purpose of a buy-to-let mortgage is to purchase a property for the sole purpose of renting it out to tenants. If you want to live in the property yourself, you will need to apply for a residential mortgage instead.

Yes, it is possible to change your existing mortgage to a buy-to-let mortgage if you want to rent out your property. However, you will need to seek permission from your lender to make this change (known as consent to let). Not all lenders approve such requests and you may have to consider a remortgage on to a buy to let basis instead. It’s important to speak to a mortgage advisor to discuss your options and find the best solution for your individual circumstances.

To get the best buy-to-let remortgage deal, it’s important to shop around and compare different lenders to find the best interest rates and fees. You should also consider factors such as the length of the mortgage term and any early repayment charges. In addition, it’s important to have a solid business plan for your rental property and a good credit score, as lenders will assess your ability to repay the loan based on these factors. It’s important to speak to a mortgage advisor to discuss your options and find the best solution for your individual circumstances.

Generally, buy-to-let mortgages tend to have higher interest rates and fees compared to standard residential mortgages. This is because buy-to-let mortgages are considered a riskier investment for lenders, as the income generated from the property is not guaranteed and may be affected by factors such as rental demand and fluctuations in the property market. However, the actual cost of a mortgage will depend on a range of factors, including the specific lender, the loan amount, and the borrower’s financial circumstances.

Residential mortgages are designed for owner-occupiers, who will be living in the property as their main residence. If you want to rent out a property, you will need to apply for a buy-to-let mortgage, which is specifically designed for this purpose. The main difference between the two types of mortgage is the way in which the loan is assessed and underwritten by the lender and also how it is regulated. A buy-to-let mortgage lender will typically base their decision on the rental income potential of the property, whereas a residential mortgage lender will consider factors such as the borrower’s income and credit commitments. It’s important to note that if you obtain a residential mortgage with the intention of renting out the property, you could be in breach of your mortgage terms and potentially face legal action.