Chat With Us

Call Us

03455 120 125

Chat With Us

Call Us

03455 120 125

Guides – BTL Mortgages

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

  • Having used a number of mortgage advisors in the past, I can say that Thameside were a breath of fresh air. We have an unusual situation and were told we couldn’t get what we needed from other advisors. Thameside were able to arrange a mortgage and kept us updated constantly and were available any time to discuss all the usual issues. Highly recommend to anyone looking for a mortgage.

    Christian Willmore Avatar Christian Willmore

    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

    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
  • Andrew and Laura have been very helpful every time we have spoken to them. They have quickly processed our transactions and responded to any issues immediately. We highly recommend Thameside Mortgages and all the services they offer. Thank you for helping us through our recent propert purchase.

    Gilly Wright Avatar Gilly Wright

    We used Thameside Mortgages for the purchase of our first home. We had both a professional and brilliant service from Andrew and his team. I would highly recommend Thameside Mortgages. They go above and beyond and guided us through the whole process. Thank you so much Andrew.

    Alice Gedge Avatar Alice Gedge

    Introduced to Mr Sheen in 2016 and using his services for me and my family since then. When I was looking for the second mortgage, I was unable to find him at his earlier employers, as he had meanwhile started Thameside Mortgages. I spent two days on internet, found him and contacted. I appreciate 7 respect his services, integrity & professionalism.

    Rajen Saraswati Avatar Rajen Saraswati
  • 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

    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

    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
  • 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

    My partner and I have used Andrew and his team several times now and will continue to do so, or recommend him, wherever possible. Whether it’s a mortgage, buildings, contents or life insurance, Andrew and his team, without fail, go above and beyond in delivering an exceptional service and client experience from start to finish. Andrew and his team respond speedily by email and/or make themselves available to speak directly. Their insight is incredibly valuable and offer kindness and patience too at a time when decisions can be more challenging. Additionally, Andrew has offered suitable products where other advisers have been unable. Thank you Thameside - you are absolutely our ‘go to’ and your service is genuinely appreciated at a time when it is needed!

    Claire Shepherd Avatar Claire Shepherd

    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
  • 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

    Can not fault the service offered by Thameside Mortgages. Our personal advisor Jason was understanding accommodating and incredibly knowledgeable. He understood exactly what we needed and was in constant communication throughout our process and the after sales care we are currently receiving is impeccable. Congratulations Thameside Mortgages you have made our dream of owning a home come true!

    Thomas Esam Avatar Thomas Esam

    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
  • 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

    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

    We have used Thameside Mortgages now for six of our remortgages over many years. Andrew and his team have been absolutely outstanding. They have always delivered on the best mortgage for us, based on our changing family circumstances, and also have brought ideas and advice that has been extremely helpful to guide us in making the best choice. What has been very impressive is that they are focused on a long-term relationship, not simply a quick commission, and have a few times taken us to mortgage offer stage, where we have backed out for various personal reasons, and they have not asked for any payment for much time and effort on their part getting that far in the process. I am reassured to know where to go for our mortgage advice!

    J Avatar J
  • I recently used Thameside Mortgages and their recommended solicitors when purchasing my property I can’t recommend them enough! Not only do I feel that I ended up with a very competitive mortgage, from start to finish the team kept me up to date on the progress of my mortgage application and the conveyancing process. They were always very quick to reply to any questions I had and I credit them with helping me exchanging contracts within just 7 weeks. Andrew, Lydia and Laura, thank you so much for all your help. I can’t thank you enough!

    Erin LaBelle Avatar Erin LaBelle

    Andrew has dealt with our mortgage and remortgage since we bought our first home 12 years ago. The service and advice is always spot on, hence why we always return without question. It's peace of mind knowing we can trust Thameside to take care of everything and give us the advice we need.

    Rhys Jones Avatar Rhys Jones

    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
  • Andrew & Laura were amazing at Thameside Mortgages. They were able to secure us a mortgage after we purchased the property, so only a few lenders were available to us. We were happy with the mortgage they recommended. The conveyancer wasn't the best, but Andrew & Laura pushed that side too. This is the second mortgage I've got through Thameside Mortgages and I will definitely use them again! Can't recommend them enough. Fantastic service, always available and happy to help. Thanks guys 🙂

    paul sharp Avatar paul sharp

    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

    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
  • 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

    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

    Thameside Mortgages have been fantastic. They helped me through the whole mortgage process and were totally supportive. I was not only trying to buy a house but also remortgage my old one at the same. I can t tell you how stressed I was but Andrew and Lydia were amazing and walked me through the whole process. They will always do their best to help you. Believe me you are in safe hands with them. Thanks Sharon

    Shaz Call Avatar Shaz Call
  • 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

    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

    This is the 3rd time I have used Thameside Mortgages , I was so impressed with their professionalism and quick response. They helped me through every step of the way and continue this service after completion. It was such a pleasure throughout the whole process , I would definitely recommend this company to all my friends and family . Mrs Pamela Payne

    Pamela Payne Avatar Pamela Payne