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Buy To Let Mortgage Guide

A buy-to-let mortgage is a type of mortgage designed for individuals who want to purchase a property with the intention of renting it out to tenants. These mortgages are specifically designed for landlords and are different from residential mortgages, which are intended for owner-occupiers.

Buy-to-let mortgages typically have higher interest rates and require larger deposits than residential mortgages, as they are considered to be a higher-risk investment. The amount of the mortgage loan is usually based on the expected rental income of the property, as well as the borrower’s income and credit history.

With a buy-to-let mortgage, the borrower is typically expected to put down a deposit of at least 25% of the property’s value, although some lenders may require a higher deposit. The borrower is also responsible for paying interest on the mortgage and making repayments on the loan. The rental income generated from the property can be used to cover these costs and potentially generate a profit for the landlord.

How much deposit do I need for a Buy-To-Let (BTL) mortgage?

Typically, a deposit of at least 25% of the property’s value is required for a buy-to-let (BTL) mortgage. However, the exact amount of deposit required may vary depending on the lender and the borrower’s individual circumstances.

Some lenders may require a higher deposit, particularly if the borrower has a limited credit history or if the property is considered to be a higher-risk investment. In some cases, it may be possible to obtain a buy-to-let mortgage with a smaller deposit, but this is generally less common and may come with higher interest rates or more stringent borrowing criteria.

It’s important to note that in addition to the deposit, borrowers will also need to pay additional fees and costs associated with the mortgage, such as arrangement fees, valuation fees, and legal fees.

How many Buy-To-Let mortgages can I have?

The number of Buy-to-Let (BTL) mortgages an individual can have is not fixed, as it depends on several factors such as the lender’s criteria and the borrower’s financial circumstances. However, it is worth noting that lenders may have restrictions on the number of BTL mortgages they will offer to a single borrower.

In recent years, regulatory changes were introduced that affect portfolio landlords, which are defined as individuals or companies with four or more mortgaged BTL properties. Under the new rules, portfolio landlords are subject to stricter affordability assessments and may face additional requirements from lenders, such as providing business plans and cash flow forecasts.

Lenders may also consider factors such as the borrower’s experience in managing rental properties, the rental income generated by their existing properties, and the overall value of their portfolio when assessing applications for BTL mortgages. It is important to note that each lender will have its own criteria and requirements, so it is always advisable to seek professional advice from a qualified mortgage broker before making any decisions.

What is a Portfolio Landlord?

A portfolio landlord is typically defined as a landlord who owns four or more mortgaged buy-to-let properties. This definition was introduced by the Prudential Regulation Authority (PRA) in 2017 as part of changes to the underwriting standards for buy-to-let mortgages.

Under the PRA rules, portfolio landlords are subject to additional underwriting requirements when applying for a new buy-to-let mortgage or seeking to refinance an existing one. Lenders must conduct a more thorough assessment of the landlord’s overall portfolio, including rental income, property values, and outstanding mortgage balances, to ensure that the borrower can manage their portfolio in a sustainable and affordable manner.

Additionally, portfolio landlords may face stricter affordability tests, more extensive documentation requirements, and potentially higher interest rates or fees compared to those with smaller property portfolios. However, the exact underwriting standards and requirements may vary between lenders.

Are Buy-To-Let mortgages mostly interest-only?

Traditionally, Buy-to-Let (BTL) mortgages have been mostly interest-only mortgages. This means that the borrower only pays the interest on the mortgage loan each month, without reducing the capital debt. The borrower is expected to repay the full amount of the mortgage loan at the end of the mortgage term, usually by selling the property or using other means such as savings, investments or alternative financing arrangements.

There are several reasons why interest-only mortgages are popular with BTL borrowers. One reason is that the monthly payments are typically lower than those for repayment mortgages, which can make it easier for landlords to cover their costs and generate a profit from rental income. Additionally, interest-only mortgages can provide greater flexibility for landlords, allowing them to manage their cash flow and reinvest any surplus funds into their property portfolio.

However, it is worth noting that interest-only mortgages come with greater risks than repayment mortgages, as the borrower is responsible for repaying the full amount of the mortgage loan at the end of the term. If property prices fall or rental income decreases, the borrower may struggle to sell the property for enough to repay the mortgage debt. Therefore, it is important for BTL borrowers to have a robust repayment strategy in place and to seek professional advice before making any decisions.

It is important for individuals seeking advice on the tax implications of BTL mortgages to seek the services of a qualified tax professional who can provide customised advice based on their specific financial situation. Thameside Mortgages are not tax advisers and cannot provide tax advice.

Buy-to-let mortgages - how much can I borrow?

A buy-to-let mortgage differs from a residential mortgage in that it is typically based on the expected rental income of the property rather than the borrower’s income and ability to repay. Lenders usually require the rental income to be at least 125-145% of the mortgage payments (depending on the borrower’s tax status) at a predetermined interest rate to ensure that the borrower can afford to make the repayments even if the property is vacant for a period.

In cases where the rental income falls short of the lender’s requirements, some lenders may allow “top slicing.” This involves considering the borrower’s overall income and assets, rather than solely relying on the rental income, to assess affordability for the mortgage. If the rental income is insufficient, the borrower may be able to use their personal income or other assets to “top up” the rental income and meet the lender’s requirements.

Top slicing is often used by high-net-worth borrowers or those with significant income from other sources who are seeking to invest in property but may not meet the strict rental income criteria of the lender.

How long is a typical Buy-To-Let mortgage?

The typical mortgage term for a Buy-to-Let (BTL) mortgage in the UK can vary, but it is usually between 20 and 35 years. However, some lenders may offer shorter or longer mortgage terms, depending on their products and lending criteria.

Can a First Time Buyer purchase a Buy to Let?

While it is possible for a first-time buyer to obtain a Buy-to-Let (BTL) mortgage, it is less common than obtaining a residential mortgage.

Lenders typically require BTL borrowers to have a minimum amount of experience as a landlord or to already own a residential property. This is because BTL mortgages are considered riskier than residential mortgages, and lenders want to ensure that borrowers have the knowledge and experience to manage rental properties and tenants effectively.

However, some lenders may offer BTL mortgages to first-time buyers who meet their lending criteria, such as having a good credit score, sufficient income, and a suitable deposit.

It’s important to note that BTL mortgages may have different requirements, fees, and interest rates compared to residential mortgages, and it’s crucial for first-time buyers to fully understand the risks and obligations of being a landlord before taking out a BTL mortgage. Seeking advice from a qualified mortgage professional and a tax adviser is highly recommended before making any financial commitments.

The Financial Conduct Authority does not regulate building surveyors.

Thameside Mortgage Ltd are not regulated by The Royal Institution of Chartered Surveyors, we do not have any involvement in the provision of this type of service / activity. We are not qualified surveyors and the information provided on this website is for informational purposes only. The information provided is not intended to be a substitute for professional advice, inspection, or survey.

It is important to seek professional advice and to undertake a proper survey/inspection before making decisions or taking actions related to a property.

What Our Clients Are Saying

  • Fantastic guidance and service all the way through the process of our purchase. Very quick to respond to our questions and would certainly recommend.

    Aaron Jago Avatar Aaron Jago

    Thameside were amazing! Made the process completely stress free and felt informed throughout. I’ll go with them every time.

    Ellie Blackall Avatar Ellie Blackall

    We've bought our first home with Thameside Mortgages and it was a wise decision to choose them over others. Andrew made sure that everything is done for us and helped us beyond our expectations. Both he and Laura are very responsive, professional and welling to help anytime is needed. Our journey was a long one, being a chain but they stood side by side with us the whole process even in this difficult time. If I should choose again I would definitely choose them again. I recommend them 100%. Well done Thameside Mortgages 👌

    Partene Ramona Avatar Partene Ramona
  • Absolutely the best, most helpful and speedy broker I've ever worked with - Thameside sorted everything including finding the right mortgage and insurances for me, guiding me through the applications and keeping me posted throughout the process. Particular thanks for their endless patience with me dithering over every decision, but because of their honest and clear advice, I'm completely comfortable I've made the right choices. I really couldn't recommend these guys enough!

    Kate D Avatar Kate D

    Thameside Mortgages, Jason Senior Financial Adviser is the most proactive Adviser I have had the pleasure of working with. He helped me not only with the purchase of my Property 5 years ago but also with my Remortgage couple days ago, very versatile with a lot of knowledge and huge experience a really great, amazing person. My e-mail was answered frequently within a minute, he was quick on the document chase. Friendly professional, service, I definitely recommend it. And very decently. Thank you so much Jason.

    stanislaw oleniacz Avatar stanislaw oleniacz

    Couldn't recommend Thameside Mortgages enough, both Andrew and Laura have and continue to be a huge support in the process for us. We have been kept up to date at all times, provided as much information as possible and have received helpful responses to any queries we have had. They have made a stressful process much easier and we couldn't have wished for a better service.

    Laura Ward Avatar Laura Ward
  • Andrew and his team are great to work with! They are very knowledgeable and have been very helpful throughout the whole process!

    Yafet Cole Avatar Yafet Cole

    Jason was very knowledgable and calm during the whole process and always available to answer my questions. I would definitely use Thameside again.

    Kerry Briggs Avatar Kerry Briggs

    Huge thank you to Andrew, Laura & the team for all their help in sorting out my sons remortgage. In what was an extremely difficult time for us as a family they went above & beyond to make sure everything was dealt with quickly & efficiently, searching the market to obtain the best possible deal for him. Highly recommend their service & Andrews knowledge was an absolute godsend. Thank you all once again for the excellent service, we will certainly recommend you as often as possible 😊

    Helen Clarke Avatar Helen Clarke
  • Brilliant service from start to finish. Andrew and the team were friendly, knowledgeable and available at every step of the way during the remortgage process ensuring it went smoothly and were always available to help. Would thoroughly recommend.

    Pietro Boffa Avatar Pietro Boffa

    I could not recommend Thameside Mortgages More! Andrew is always fantastic to deal with, he is always extremely responsive, supportive and helpful! Thanks to the team at Thameside and Andrew for your constant support!

    Larissa Tait Avatar Larissa Tait

    Impeccable service from Andrew and his team @ Thameside Mortgages. Very helpful, thorough and professional service. What’s more, we were under time restraints due to the temporary reduced rates of stamp duty; Thameside exceeded our expectations and got the job done with the mortgage secured and plenty of time to spare; a pleasant experience all round. Thanks Thameside!

    Carl Jago Avatar Carl Jago
  • I've been working with Andrew and his team for a few years now. After recently completing a re-mortgage with Thameside I thought I'd leave a quick review to help others looking for help with the mortgage and to show my appreciation to everyone at Thameside. Their customer service is fantastic. Each time the process is completely stress free. The team are knowledge and always willing to go above and beyond to help make the process go smoothly. They take the time to explain the products they offer in a way that is easy to understand. They are profession and personable at the same time. I especially like the person touches the team do, like sending a thank you card on completion. I would highly recommend the services they offer. Keep up the good work Thameside.

    Surj Avatar Surj

    I've used Andrew from Thameside Mortgages twice now, i'd highly recommend his service. The information provided was very in-depth and easy to understand. My most recent mortgage offer was about to complete, when Andrew called and had found a better rate and saved us more money which was a lovely surprise 🙂 Would use his service again!

    matt grix Avatar matt grix

    Both Andrew and Laura were extremely helpful and responsive from start to finish. I highly recommend using Thameside Mortgages, we will definitely use them again.

    Jake Whitford Avatar Jake Whitford
  • Andrew and the team at Thameside Mortgages provided a fantastic service throughout our re-mortgage process. From detailing how it all works and what steps we have to take along the way with taking care of our best interests. Andrew was also able to sort out life insurance for me and my partner ensuring we are protected with what we seemed necessary. I very much look forward to using Thameside Mortgages in the future and would recommend anyone else to do so.

    Jordan Smith Avatar Jordan Smith

    First class and professional service. The advice given on various mortgage products, terms and insurance options were excellent. Throughout the sale/purchase they were in constant contact with my solicitor and estate agent, and kept me up to date regularly. Would highly recommend.

    Nick Harris Avatar Nick Harris

    Andrew and the Team were not only extremely knowledgeable in their field, but extremely professional and thorough throughout the process. I can't recommend the team enough and would strongly urge engaging the team for your mortgage and life insurance management. Thank you Thameside Mortgages.

    Matthew Harrison Avatar Matthew Harrison
  • I used Andrew and team 5 years ago and they were brilliant, I couldn't recommend them enough. Recently used them for my renewal and nothing was a problem and felt easy to complete. First class hassle free!!

    Shaun Bradford Avatar Shaun Bradford

    I really can’t recommend Thameside Mortgages enough. From start to finish, the process was very well explained and completely hassle free. They found me an amazing deal and their communication, responsiveness and support was second to none. A heartfelt thank you to Andrew, Laura and Lydia; keep up the brilliant work.

    David Leece Avatar David Leece

    Thank you to Thameside Mortgages to Laura and Andrew, helping me get the mortgage, they were both very professional. The mortgage was smooth and efficient. I had difficulties with the solicitor, but Laura and Andrew have been there to support me throughout. I will definitely be in contact for a future mortgages. Happy to recommend to anyone.

    chong brown Avatar chong brown
  • The team went above and beyond to help us secure the best possible rate. During what was a difficult time for us, they’ve been so supportive and empathic. Their work is delivered with pedagogy and transparency, for customers to understand relevant details and take informed decisions with confidence. I strongly recommend their mortgage services.

    Mikhaël Mazu Avatar Mikhaël Mazu

    We used Thameside Mortgages for our mgt for our new property. We had professional and brilliant service from Andrew and his team. I would highly recommend Thameside Mortgage as they go over and above what I expected from them. Thank you so much Andrew and your team X

    Kelly Carberry Avatar Kelly Carberry

    Andrew and his team did an amazing job on our mortgage and the surrounding process. We had our offer in principle within 24 hours of contacting them. The on boarding was seamless and laura kept us updated with progress from our solicitors throughout the wider conveyancing process which means we were always well informed. I would not hesitate in recommending them to anyone

    Phil Wrigglesworth Avatar Phil Wrigglesworth
  • This is the second time I've instructed Andrew Sheen at Thameside Mortgages to find and secure the right deal for me. On both occasions I've had complete confidence in his ability to work with my best interests at heart. So professional and personable, I hope to always work with him when moving house or remortgaging. Not to mention, he's also a really top bloke. Thank you Andrew and team. Let's do it all again in 5 years time.

    Tom Denton Avatar Tom Denton

    Fantastic service from start to finish. Andrew and Laura assisted with the purchase of mine and my partners first home, it was great to know that we were in safe hands throughout. Highly recommend!

    Noah Kirby Avatar Noah Kirby

    We used Thameside Mortgages for our recent mortgage application and cannot speak highly enough of Andrew and his team. They were professional and attentive from the outset and helped us through every step of the process. Andrew consistently communicated with us throughout to ensure the process was as easy and streamlined as possible, and we felt we received a completely personal service. I wouldn’t hesitate to recommend Thameside Mortgages for anyone considering a mortgage application in the future and will definitely utilise their service again.

    Sarah Blanks Avatar Sarah Blanks
  • From start to finish Thameside Mortgages have been available and very helpful in guiding us through not only moving house, but also remortgaging in these difficult times. I can’t tank Andrew, Laura and Lydia enough for their care and fantastic work ethic! Will definitely be using them in the future!!

    Chris Bassett Avatar Chris Bassett

    I couldn't recommend Thameside Mortgages enough - they helped me with my life insurance and Laura was so helpful and so patient with me! Andrew clearly has incredible knowledge and was very supportive and considerate when discussing all of my options. Laura was brilliant at following up and helping me through the process and was very quick responding to any queries that I had. Will most definitely use them again for any further business that I have, A* service - thank you so much!

    Ceri Morgan Avatar Ceri Morgan

    Great service from start to finish, made the whole process very smooth and easy

    Chris Lewis Avatar Chris Lewis
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