How Is a Buy-to-Let Mortgage Different?
A buy-to-let mortgage is for a property you intend to rent out rather than live in. Compared with a residential mortgage, you will often find:
- Rent plays a central part in affordability. Lenders commonly test whether expected rent would comfortably cover the mortgage interest. The exact test varies by lender.
- A larger deposit is often expected. Lenders typically ask for more than they would for a home you live in.
- Interest-only is common. Many buy-to-let mortgages are interest-only, although repayment mortgages are also available. With interest-only you still need a plan to repay the loan at the end of the term.
- Product fees and rates can differ. Compare the total cost, not just the headline rate.
- Your own income may still matter. Some lenders also look at your income and existing commitments.
An appropriately authorised adviser can explain how these points apply to your plans.
Already own the property and your deal is ending? See finding a remortgage adviser.
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Buying in Your Own Name or Through a Company
Some landlords buy in their own name and others through a limited company. Lender criteria, product availability and the tax position can differ between the two.
A mortgage adviser can explain how lenders treat each structure. For tax questions, speak to a qualified tax adviser or accountant before you decide.
First-Time Landlords and Existing Landlords
First-time landlords. Some lenders will consider applicants who have not let a property before, but criteria vary. Lenders may ask about your income, deposit and experience, and may expect you to be a homeowner.
Existing landlords. If you already have mortgaged rental properties, lenders often apply extra checks as your portfolio grows. An adviser can explain how this may affect your options.
The Costs of Buying and Owning a Rental Property
Budget for more than the deposit and mortgage payments:
- Stamp duty or its equivalent: Stamp Duty Land Tax in England and Northern Ireland, Land and Buildings Transaction Tax in Scotland and Land Transaction Tax in Wales. Higher rates or surcharges may apply to additional properties. Rules and thresholds change, so check the current position.
- Mortgage fees: product or arrangement fees, which can be a fixed amount or a percentage of the loan.
- Legal, valuation and survey fees.
- Letting costs: letting or management agent fees, landlord insurance, safety certificates and maintenance.
- Periods without a tenant: you may still need to pay the mortgage while the property is empty.
- Tax on rental income. This depends on your circumstances, so take tax advice.
- Mortgage adviser fees: some advisers charge customers directly, others receive commission from lenders, and some receive both. Ask how any adviser is paid.
Landlords also have legal obligations, including requirements that can change over time. Check the current rules for the property and the area it is in.
Remember: Local Advisors' introduction service is free. Any subsequent mortgage-advice fees are separate arrangements between you and the adviser.
What Should You Have Ready Before Speaking to an Adviser?
- The price of the property and the deposit you plan to put in.
- The rent you expect it to earn, if you have an estimate.
- Whether you plan to buy in your own name or through a company.
- Your income and employment details, and your existing commitments.
- Details of any other properties you own and any mortgages on them.
- If you're remortgaging, your current lender, balance, interest rate and the date your deal ends.
You don't need to have found a property before speaking to an adviser.
How Can a Buy-to-Let Mortgage Adviser Help?
Depending on the service they provide, an adviser may:
- Discuss your plans and your financial circumstances.
- Explain how lenders assess rental income and what that may mean for how much you can borrow.
- Compare products from the lenders they can access.
- Explain fees, interest-only and repayment options and other costs.
- Recommend a suitable mortgage where appropriate.
- Help with the application and keep in touch while it progresses.
Not all advisers have access to the same lenders or products. It's worth asking which lenders they can consider, how they charge and what support they provide.
Regulation and protections. The rules that apply can depend on the type of mortgage and how the property is used. Ask any adviser whether they are authorised by the FCA and what protections apply to your type of mortgage. Our guide explains how to check if a mortgage advisor is FCA authorised.
The adviser is responsible for providing any mortgage advice and recommendations.
How Local Advisors Helps You Find a Buy-to-Let Adviser
Finding a mortgage adviser doesn't have to mean contacting several businesses yourself. Our free introduction service connects people looking for mortgage advice with advisers who cover their area.
Step 1: Tell us about your requirements. Complete our short online enquiry for your buy-to-let mortgage. We ask for some basic information so we can look for an adviser who can discuss it.
Step 2: We look for an adviser covering your area. We use the information you provide to identify an adviser who can discuss your enquiry. Availability depends on your area and on the advisers taking enquiries at the time. Before accepting adviser businesses onto our platform, we carry out checks covering FCA status, business websites, wider online presence, Google Business Profiles, customer reviews and ICO registration. These checks help us assess the businesses we work with. They do not replace your own checks or guarantee the suitability of any particular adviser.
Step 3: Discuss your options. The adviser you're introduced to can discuss your circumstances, explain their service and help you understand your mortgage options. The initial consultation is free, and you're under no obligation to proceed. Local Advisors does not provide mortgage advice or recommend mortgage products. Any regulated mortgage advice is provided by the adviser you're introduced to.
Questions Worth Asking a Buy-to-Let Mortgage Adviser
- Which mortgage lenders can you consider for buy-to-let?
- How will lenders assess the expected rent and my own income?
- How would buying in my own name or through a company affect my options?
- How much deposit might I need?
- What fees might I need to pay, and when?
- Is interest-only or repayment more suitable, and what would each mean for me?
- How would my existing properties and mortgages affect an application?
- Are you authorised by the FCA, and what protections apply to this mortgage?
You should feel comfortable asking questions and requesting clarification before deciding whether to proceed. Our guide to 10 questions to ask a mortgage advisor has a fuller checklist.
Helpful Mortgage Adviser Guides
How to Choose a Mortgage Advisor
How to compare advisers, check credentials and assess the services they offer.
How Much Does a Mortgage Advisor Cost?
Common charging arrangements and questions to ask about fees.
How to Check if a Mortgage Advisor Is FCA Authorised
How to check a firm's regulatory status and permissions.
Frequently Asked Questions
Do I need a specialist adviser for buy-to-let?
Not necessarily, but buy-to-let criteria differ from residential lending, so ask whether the adviser regularly handles buy-to-let mortgages.
How much deposit do I need for a buy-to-let mortgage?
It depends on the lender and product. Lenders typically ask for a larger deposit than for a residential mortgage.
Can I get a buy-to-let mortgage as a first-time landlord?
Some lenders will consider it, subject to their criteria. Others may not.
Do lenders look at rental income or my own income?
Often both. Lenders commonly test whether the expected rent covers the mortgage interest, and some also assess your income and commitments.
Can I remortgage a buy-to-let property?
Yes, it is possible to remortgage a rental property, for example when a deal ends. Check for early repayment charges first. See our remortgage adviser page.
Is Local Advisors free to use?
Yes. Our mortgage-adviser matching service is free, and the advisers we introduce offer a free initial consultation. Any subsequent mortgage-advice fees are agreed separately with the adviser. Local Advisors receives payment from participating adviser businesses for introductions.
Does Local Advisors provide mortgage advice?
No. Local Advisors is a mortgage-adviser introduction service. We connect customers with mortgage advisers who can discuss their requirements. Any mortgage advice or personalised mortgage recommendations are provided by the adviser.
Other mortgage situations
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