Buy to let mortgages

A buy to let mortgage is the type of mortgage you need if you’re looking to purchase a new property (or keeping an existing property) that you plan to rent out.

Let to Buy

A “let to buy” is a scenario where you are able to remortgage your current home with a “buy to let mortgage”, borrowing more money against it, in order to raise a deposit to purchase a new main residence for yourself.

Generally speaking, the majority of buy to let mortgages are assessed based on how much rental income a property is capable of generating.  For example, a property that can be rented for £1,000 per month would be able to achieve a larger mortgage loan than a property that can be rented out for £500 per month.

They also have stricter rules on loan to value, meaning that most buy to let lenders require a minimum deposit of 25%, however, some specialist lenders can provide buy to let mortgages with smaller deposits.  

Lending Amount

Generally speaking the majority of buy to let mortgages are assessed based on how much rental income a property is capable of generating.  For example a property that can rent out for £1,000 per month would be able to achieve a larger mortgage loan than a property that can be rented out for £500.

They also have stricter rules on loan to value, meaning that most buy to let lenders require a minimum deposit of 25%, however some specialist lenders can provide buy to let mortgages with smaller deposit.  

Can I purchase property through a limited company?

Yes, investment properties such as buy to let can be purchased through a limited company.  Typically the limited company has to be an “SPV” a Special Purpose Vehicle which is setup specifically for the investment properties.  Investors usually use this method of buy to let ownership to be more tax efficient, however you should speak with a qualified adviser to see if this method is right for you.  

How to arrange a buy to let mortgage?

We would always suggest going through a qualified adviser.  Buy to let mortgages have far more complex rules than ordinary residential mortgages.  Additionally some lenders will also only deal with applications through brokers.