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If you’re planning to rent out your property, you’ll need a buy-to-let mortgage. Many lenders consider buy-to-let mortgages to be higher risk, so you might need to meet specific conditions to qualify. These requirements can vary between lenders and may include the following:

  • Homeownership: Some lenders may require that you already own your home, either outright or with a mortgage.
  • Credit Record: You should have a good credit history and not be overextended on other borrowings, such as credit cards.
  • Income Evidence: You may need to provide proof of employment income or earnings from self-employment, separate from rental income. Typically, this should be around £25,000 or more annually; earning less might make it difficult to get approval.
  • Age Limit: Lenders often have a maximum age limit, usually around 75 years, although some may have lower limits.
  • Deposit Requirement: A loan-to-value (LTV) ratio of at least 75%, meaning you’ll need a minimum 25% deposit for a buy-to-let mortgage.
  • Rental Income: The amount you can borrow is based on the expected monthly rental income, which should cover around 125% of your mortgage repayments.

How Do Buy-to-Let Mortgages Work?

Buy-to-let mortgages are similar to ordinary mortgages but with some key differences:

  • Higher Fees: The fees associated with buy-to-let mortgages are generally higher.
  • Higher Interest Rates: Interest rates for buy-to-let mortgages tend to be higher.
  • Minimum Deposit: The minimum deposit is usually 25% of the property’s value, though it can range from 20% to 40%.
  • Interest-Only Options: Most buy-to-let mortgages are interest-only, meaning you pay only the interest each month and repay the original loan in full at the end of the mortgage term. Repayment options are also available.

How Much Can You Borrow for Buy-to-Let Mortgages?

The amount you can borrow for a buy-to-let mortgage is closely tied to the expected rental income from the property.

Lenders need to ensure that your rental income will cover the mortgage payments with some additional margin. Typically, they require the rental income to be 25–30% higher than your mortgage payment.

If the property's rental valuation isn't high enough, the lender may require a lower loan-to-value (LTV) ratio, meaning you'll need a larger deposit.

To estimate your potential rental income, consult local letting agents or check online rental listings for similar properties in the area.

Portfolio landlords, HMO, MUFB and specialist property types

We have established excellent relationships with multiple specialist lenders through our Network to be able to help landlords including large portfolios with different style properties including flats, MUFB etc to secure the best mortgages.

Where to Get a Buy-to-Let Mortgage

You can obtain a buy-to-let mortgage from most major banks as well as from specialist lenders.

Consulting a mortgage adviser is highly recommended before taking out a buy-to-let mortgage. They can help you find the most suitable deal tailored to your needs.

Whether you're starting out or expanding your property portfolio, we've got a range of mortgages to suit you.

Fill in an enquiry to book in a call to discuss your options.

Not all Buy to Let mortgages are regulated by the Financial Conduct Authority

Why Penguin Mortgages