Buy-to-let mortgages

If you’re looking to purchase your buy-to-let property by taking out a mortgage, there are some key points that property investors should be familiar with. This helpful guide will highlight the important aspects to consider.

Buy-To-Let Mortgage Lending Criteria

You need to be over 18 – Some lenders require you to be 21+
Earn over £25,000 a year
You’ll need to be younger than 70 or 75 when the mortgage term ends
Have a good credit score
Are already a home owner

The criteria may change slightly between different mortgage lenders, so it’s important to find out what the buy-to-let mortgage criteria is when making an enquiry with a lender.

How much can you borrow?

Most mortgage lenders require you to put down a deposit of at least 25%, though this can vary between 20-40% depending on the mortgage lender you choose. In most cases, you will only be able to borrow a maximum of 75% of the property price when securing a buy-to-let property.

Use our mortgage calculator to get an idea of how much you might be able to borrow for your buy-to-let mortgage.

Mortgage calculator

Calculate the maximum mortgage you would be able to get on a property.

As mortgage lenders will take many different factors into account when calculating your loan amount for a buy-to-let mortgage, the figure produced by the mortgage calculator is only an estimate. In addition, most lenders will conduct a rent-to-interest (RTI) cover calculation, where rental income must be over 125% of your monthly mortgage payments. At Alesco, we only focus on areas that we have forecasted to deliver high rental yields for the foreseeable future.

WHAT PAYMENT OPTIONS ARE AVAILABLE?

There are two monthly payment options available for buy-to-let mortgage holders:

Interest Only Mortgages – Where you only pay the interest on the loan

Capital Repayment Mortgages – where you need to pay back both the capital and the interest each month, so these types of mortgages incur higher monthly repayments.

What about Overseas Investors?

The UK is noted globally as one of the best markets for Buy-to-let properties for sale.

If you’re an overseas investor, securing a mortgage for your buy-to-let property can be slightly more challenging. Mortgage lenders will apply more stringent checks to ensure your financial stability. There is also the prospect of a high interest rate to mitigate any potential risk.

There has been a significant increase in expats securing buy-to-let mortgages for properties to rent in the UK. Mortgage lenders will often ask borrowers for higher deposits, however it’s best to explore the market to find the best lenders, offering the most favourable terms for your buy-to-let mortgage.

WHERE CAN I GET A BUY-TO-LET MORTGAGE?

The market is full of different providers offering Buy-to-let mortgages. Most major banks and building societies will offer buy-to-let mortgages, as well as specialist lenders. We recommend speaking with a mortgage broker first, as they’ll be able to make dedicated recommendations. As a bonus, many mortgage brokers will handle the paperwork for you too.

Our recommended mortgage broker is Astute Financial & Mortgage Advisers – an independent mortgage broker. Astute have consistently secured great rate, buy-to-let mortgages for our overseas and domestic investor clients over the years.

Astute Financial will search the UK mortgage market to find the right mortgage from thousands of deals available. Whichever stage you are in your search for property investments in the UK, Astute Financial will guide you through the process up to completion. To find out more, please contact Mark O’Shea on 01642 134100 or [email protected]

Explore our full range of Buy-to-let properties in UK here

Get in touch

For more information on how Buy to let mortgages work when securing a property investment in the UK, speak to a member of the Alesco team.

Contact us

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