BUY-TO-LET MORTGAGE

Invest in Your Future, One Property at a Time

A Buy-to-Let mortgage is a specialized loan designed for individuals who wish to purchase residential properties with the intention of renting them out. This type of mortgage is ideal for property investors seeking to generate rental income and potentially benefit from property value appreciation. This mortgage type is suited for those looking to build a rental property portfolio or diversify their investment assets while generating steady rental income.

Let’s answer your questions!

  • The majority of lenders would require a minimum deposit of 25%. In certain circumstances the lender may only require a 20% deposit. This does not prevent you from putting in more of a deposit if you wish to do so. The deposit level will also be determined by the maximum loan that a lender is willing to lend.

  • Certain regulated BTL mortgages would allow you to rent to family members, but generally it would be a breach of the terms and conditions of the mortgage to let to family or to reside in the property yourself. If you do wish to let to family, please touch base with one of our advisors who can guide you through the best options.

  • Unlike a residential mortgage, where the amount you can borrow is based on your affordability and earnings, a BTL mortgage would be based on the rental income that the property is likely to achieve or is already achieving. Most lenders will still require you to have your own personal income as well to make sure that any rental voids can be covered.

  • There will be limited options, buy yes there are lenders that will allow you to purchase a first property as an investment. This will be more heavily based on affordability and would be subject to your individual personal circumstances.

  • There are 2 options when it comes to a payment method on a BTL property. You can choose to have the monthly payments on a full repayment basis where you would own the property outright at the end of the mortgage term, as the balance will reduce month on month. You can also choose to have the mortgage on interest-only. The balance of the mortgage will NOT decrease month on month, but this has the advantage of keeping the monthly payment at a lower amount, thus maximising cash flow.

  • A standard BTL mortgage would involve renting out a property on a single tenancy agreement. Ordinarily a HMO (House of multiple occupancy) would be let out to several individuals and would have separate tenancy agreements. There are occasions where lenders will still allow a single tenancy on a HMO, however the majority of the time the tenants in a HMO property do not usually have a relationship with each other. A HMO would have separate bedrooms, but shared facilities, such as kitchens and bathrooms.