Buy to Let Mortgage

A buy to let mortgage is a special type of mortgage designed specifically for a landlord looking to rent out their property to tenants.

Unless you are lucky enough to be able to purchase a second property with cash and no mortgage, you will need a buy to let mortgage to purchase a property that you wish to then rent out. For more information on the buy to let process and your responsibilities as a landlord, take a look at our Buy to Let Guide, or call us today – it’s free!

A buy to let mortgage is specifically designed for landlords who are looking to rent out a property to tenants. Most buy to let mortgages are interest only, and they will not be based solely on your personal income – they will also take into consideration how much rent the particular property could generate.

You will also typically need a slightly higher deposit for a buy to let mortgage, and stamp duty charges are also higher. For more information, take a look at our Buy to Let Guide or contact one of our experienced advisors.

Using a buy to let mortgage broker is the easiest way to find a fantastic buy to let mortgage deal that is suited to you and your circumstances. We promise that we will never charge you for our services – as our customer, you are our only priority.

Finding the right buy to let property is a case of choosing the right property in the right area that will suit both your budget and circumstances.

You should always consider the type of tenant you are looking for, and whether the property or area will be suited to this. You should also consider the demand of the area or property type, and whether this demand could increase or decrease. Our buy to let mortgage guide has further information on this, as well as the services a letting agent can provide in assisting you with finding a buy to let property. A buy to let mortgage will be secured against your property, some types of buy to let mortgages are not regulated by the financial conduct authority.

How much you can borrow on a buy to let mortgage is not solely dependent on your income. The lender will also factor in the potential rental income for the property, using a rental income calculation. This calculation can vary from lender to lender, so please contact one of our expert advisors for an estimate on how much you can borrow – it’s free!

You will need a higher deposit for a buy to let mortgage. The minimum is 20%, but 25% is most common. In order to get the best rates, you will need an even higher deposit, anywhere up to around 40% of the property value.

If you are a private landlord looking to rent a property to a tenant then you will need an Assured Shorthold Tenancy (AST) agreement. When applying for a buy to let mortgage, most mortgage lenders will insist that you have one of these, and may even ask to see a copy.

Certain properties might be more difficult to secure a buy to let mortgage on due to their age, type or location. For example, there are restrictions on the number of mortgages available for ex-local authority or high rise flats. Your lender may also have restrictions on flats above commercial premises.

If you are interested in purchasing a buy to let property that you feel could be difficult to secure a mortgage against, contact one of our expert advisors for free. They will be able to advise you

Yes, however, your choice of mortgages may be limited as most lenders will require you to have owned your own residential property for at least a certain period of time (usually 6 months) before they will offer you a buy to let mortgage.

One of our advisors will easily be able to help you find any available mortgage deals if you are a first time buyer looking for a buy to let property.

A House of Multiple Occupation (HMO) is a property which will hold at least 3 tenants not of the same family but forming one household, sharing toilet, bathroom and kitchen facilities. Depending on the property and its location, you may require an HMO license. The local authority for the property can provide you with further information about this license and whether your property might require one, or already has one.

Yes. You will always be required to pay stamp duty on an additional property. For the first £125,000 of the property value, you will pay stamp duty at 3%, and this will rise in increments to 15% at anything over £1.5 million. Our stamp duty calculator can give you an accurate figure for the stamp duty you might pay on your new home.

If you sell the property for more than you paid for it, after deducting costs such as stamp duty, estate agent or legal fees, then you will be liable for capital gains tax, since you are ‘gaining capital’.

We would advise that you seek the advice of a specialist tax advisor who can explain all of the tax implications when purchasing an investment property. We work closely with a number of skilled tax advisors who we would be happy to recommend to you, should you require their services.

As a landlord, any profit you make from renting out a property will be liable for income tax. There are ways to reduce this tax bill by offsetting certain costs, including property repairs and maintenance, against the rental income.

We would advise that you seek the advice of a specialist tax advisor who can explain all of the tax implications when purchasing an investment property. We work closely with a number of skilled tax advisors who we would be happy to recommend to you, should you require their services.

Due to recent tax changes affecting those who personally own a buy to let property, many landlords are now choosing to purchase investment properties using a limited company, specifically set up for this purpose. Buy to let mortgage rates are often higher for limited companies, but there are tax benefits to this route which, depending on your circumstances, can save you money.

We would advise that you seek the advice of a specialist tax advisor who can explain all of the tax implications when purchasing an investment property. We work closely with a number of skilled tax advisors who we would be happy to recommend to you, should you require their services.

Yes. Inheritance tax is still payable on a buy to let property, but the amount you pay will depend on your circumstances.

We would advise that you seek the advice of a specialist tax advisor who can explain all of the tax implications when purchasing an investment property. We work closely with a number of skilled tax advisors who we would be happy to recommend to you, should you require their services.