Buy-to-Let Mortgages

Expert Guides

Buy to Let mortgages: What's the 411?

A Buy to Let Mortgage is for when you buy a property to rent out to the public. The are very popular with investors as a way of adding to their portfolio. We have asked Stephanie Phillips-James, one of expert advisers, to break them down.

What is the criteria for being a landlord?

The majority of lenders will require that you already own your own home. In addition, many require that you earn at least £25,000 from a source not related to letting but this does differ between lenders. A minimum deposit of normally around 25% of the property value is also required by most lenders.

Can I use my rental income as a form of income to purchase another property?

It often depends on whether you currently have a mortgage to pay on your existing buy-to-let property. If you do, then ultimately a lender will see this as debt that needs to be taken into consideration. By speaking to a mortgage adviser, they will look at your individual circumstances and advise on what your options are.

Can I raise capital on my own home to put down as a deposit on my buy-to-let property?

This is possible but it’s best to speak to a mortgage adviser who can look at your individual circumstance and run through your options.

Will I be taxed on my rental income?

As a landlord, you would be taxed on the income you make through the rent payments in line with your personal income tax liabilities. We recommend speaking to an accountant before purchasing your first property.

What is a House in Multiple Occupancy (HMO)?

A property is classed as a HMO if there are more than three tenants living there who aren’t members of the same family. Another indication is if there are shared facilities i.e. kitchen, bathroom, toilet etc.

Your choice of lenders may be limited if you’re renting out a HMO, but your mortgage adviser will be able to go through this with you. Councils can also have individual rules around HMO, so if this is something you’re considering, we recommend you speak to your local council.


If you’d like to know more about Buy to Let mortgages, click here or read our expert guide.

Or feel free to get in touch! Click here and complete this short form about yourself - we’ll be in touch very shortly. With mortgage brokers in Winchester, Southampton, Farnham, Bishops Waltham, Alton, Chandlers Ford, Alresford, Romsey and Park Gate, you are never too far from mortgage advice.

Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

Top tips for Buy-to-Let investors

If you’re thinking of taking out a buy-to-let mortgage product, we’ve put together our top tips that will help you make the right decision when it comes to buying an investment property.

Buy-to-let top tips:

Do your homework

A buy-to-let mortgage is a great way for landlords to secure a rental property investment, but you need to be sure it’s the best use of your money. Do your research and compare how your money might perform if you invested it elsewhere. Remember that a buy-to-let investment will mean tying up your capital in a property that might fall value.

Location, location, location

Just because a property is in a good location, it doesn’t follow that it’s the best place for your buy-to-let investment. You’re looking for an area that people will want to live in for all sorts of reasons.

Students, young families and commuters all have different needs so if you can match their requirements with a property that you can afford, you’ll have a better chance of finding a tenant that will make your investment work harder for you.

Do your sums

Research the properties on sale in the area you’ve decided on and explore the rent that you’re likely to achieve each month. Factor in insurance premiums and maintenance cost and remember that if your property is empty for any reason, you’ll still need to make your buy-to-let mortgage repayments.

Landlord obligations

You’ll need to decide whether you’re going to be a hands-on landlord or will appoint a property management agent to carry out work if problems arise.

If you opt to manage the rental property yourself, be prepared to deal with problems that arise promptly – and that could mean weekends and evenings too. An agent will charge you a management fee, regardless of whether the property is occupied or empty, but they should have a good network of trades to jump into action if something goes wrong at your property.

Talk to a specialist buy-to-let mortgage adviser

Buy-to-let mortgages can be complex and a more expensive option than a traditional residential mortgage so it’s vital that you get the best advice you can from buy-to-let mortgage specialists.

If you’re considering a buy-to-let mortgage for a property investment, talk to our team of expert mortgage advisers first to discover the most suitable mortgage products for your purchase. Call us on 08454 500200 and we will be able to help.

Steph and Cara have been so helpful in the process of securing my mortgage and I am very grateful for all the help they have given me. The service they provide really is second to none and I highly recommend them!


May 2020

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