Buy to Let Mortgages for UK Property

Here we explain what buy-to-let mortgages are, who can apply for them, and what steps are involved in securing finance for UK property.

(First published in 2021 but updated in 2023.)

What is a Buy-to-Let Mortgage?

Buy to let mortgages are specifically designed for landlords and property investors who buy residential property for the sole purpose of renting it to tenants.

Buy to let mortgages are often more expensive, the interest rates charged are usually higher and Mortgage lenders for buy-to-let properties usually expect a minimum deposit of 25% of the value of the property; any lower and the fees and interests rates are increased accordingly.

Who can get a buy-to-let mortgage?

You can get a buy-to-let mortgage under the following circumstances:

  • you want to invest in houses or flats
  • you can afford to take and understand the risks of investing in property
  • you already own your own home, whether outright or with an outstanding mortgage
  • you have a good credit record and aren’t stretched too much on your other borrowings, for example, credit cards
  • you earn £25,000+ a year – if you earn less than this you might struggle to get a lender to approve your buy-to-let mortgage
  • you’re under a certain age – lenders have upper age limits, typically between 70 or 75.

Where can I get a buy-to-let mortgage?

Most of the big banks and some specialist lenders offer BTL mortgages.

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

FAQs: Your mortgage related questions, answered.

When comparing buy to let mortgage options, you’ll notice that lenders have different buy to let mortgage requirements. One of the key things to pay special attention to in is the Loan to value rate (LTV). Assuming a bank says the LTV they’ll accept is 75%, that implies you’ll require a deposit of at minimum 25% of the property’s price.

A buy to let mortgage deposit is typically larger than a residential mortgage. Most buy to let mortgages require a deposit of at least 25% with a loan to value of 75%.

The best buy to let mortgage rates are accessed by offering a higher deposit. This can be around 40% meaning you have an LTV of 60%.

Interest rates differ depending on size of your deposit, the type of property you are buying and the current economic climate.

The best buy to let mortgage is one that is right for your own personal circumstances. It should give competitive mortgage rates, have a low or no arrangement fees and be flexible enough to let you switch at a later date.

Buy to let mortgages are typically more expensive than residential mortgages. The rates and arrangement fees are normally higher, and you’ll have to pay more stamp duty on your investment property. You’ll also have to pay the normal costs of conveyancing, including solicitors and surveyor’s fees.

As a common condition to most buy-to-let mortgages in the UK, the property must be let to tenants and not lived in by you. This is because your tenants should be paying you rent which you can use to repay your mortgage instalments.