Buy–To–Let Mortgage

A buy-to-let mortgage is a type of loan specifically designed for people who want to purchase property to rent out to tenants. Unlike a residential mortgage used to buy your own home, a buy-to-let mortgage is tailored to landlords — whether you’re making your first investment or expanding your portfolio.

Most lenders require a minimum deposit of 25% of the property’s value, although some may accept as low as 20%. The more deposit you can provide, the better the mortgage rate you’re likely to get.

To ensure your investment is viable, lenders use a ‘rental stress test’. This means the projected rental income typically needs to cover between 125% and 145% of the monthly mortgage repayments — based on a notional interest rate (often around 5% or higher).

Most buy-to-let mortgages are interest-only — you pay only the interest each month and repay the full loan amount at the end of the mortgage term. Repayment options are available too, which allow you to build equity in the property over time.

If you have four or more buy-to-let properties, you’re classed as a ‘portfolio landlord’. This comes with more detailed affordability checks, such as providing business plans and rental income across your whole portfolio. We can help you meet these criteria.

Rental income is taxable, and you must declare it via a Self Assessment tax return each year. Since recent tax reforms, landlords no longer receive full mortgage interest relief. Instead, a 20% basic rate tax credit is available. For tailored advice, we recommend consulting a tax advisor.

Buy-to-let properties are subject to a 3% Stamp Duty surcharge on top of standard residential rates. Be sure to factor this into your purchase budget.

Depending on your local authority, you may require a landlord licence. As a landlord, you’re also responsible for safety regulations, protecting tenant deposits, and maintaining the property in a liveable condition. We’ll help guide you through these obligations.

• Whole-of-market access to 90+ UK lenders

• Exclusive buy-to-let products and rates

• Tailored advice from CeMAP-qualified experts

• Support for first-time landlords and property investors

• Flexible appointments — face-to-face, phone or video