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Guide to Buy-to-Let Mortgages

Compare buy to let purchase mortgages with nationwide specialist mortgage advisers online. You can save money when you compare buy to let purchase mortgage rates with quotes from some of the leading mortgage providers in the UK.

The rules around landlord finance can be complicated from unusual properties, rental stress tests, limited company buy to let and more so for portfolio landlords. Your circumstances can limit options from minimum income, credit score and experience.

With Bespoke Finance you can apply online for a free enquiry and receive advice from mortgage advisers specialising in property investment finance.

Can I get a buy-to-let on a new build?

Yes - most (but not all) mortgage lenders limit the loan to value on new build properties to around 75% LTV. This is to accommodate the "new build premium" that buyers pay, the value is expected to fall a little before keeping up with the rest of the local market.

Can I get a buy-to-let as a joint application?

Yes - most (but not all) mortgage lenders limit the number of applicants as up to 4. We have helped investors with almost every combination to think of including children & parents, cousins, business partners and so forth.

Can I get a Buy-to-Let as first time buyer?

We can help first time buyers invest in buy-to-let, there is a lot to consider for you. It may disqualify you from Government schemes such as Help to Buy and may result in higher SDLT if you later decide to buy a residential.

As a first time buyer with no mortgage experience options are low and rates may be higher than homeowners.

What is buy to let stamp duty?

You must pay Stamp Duty Land Tax (SDLT) if you buy a property, the amount is a percentage of the value of the property.

If this is the first property you pay the standard SDLT rates. If you already own another property (such as a home) then you pay an extra 3%.

For instance, properties valued from £125k to £250k usually pay 2% SDLT. If you own an existing property that will be 5%.

You can check out our calculator for more information and conveyancers will discuss with you the exact SDLT you will have to pay. Whilst we keep it simple here, it can be a complicated tax.

... read more on What is buy to let stamp duty?

Is buy-to-let worth it?

The investment is not unlike any others - you can make good returns or you may make a loss from property downturns, low rental demand or bad tenants to give a few examples.

Many investors like buy-to-let as it is a brick & mortar investment, you have a physical asset to show for your investment. One that has the possibility to be resold at a loss, break-even or profit depending on market conditions. An asset that if chosen wisely will give you monthly returns on your investment.

It can also be hands-on, you can talk to your tenants and provide a good service. You can invest time to renovate the property. Your efforts can affect the bottom line.

Am I a portfolio landlord?

The PRA defines portfolio landlords as: “borrowers with four or more distinct mortgaged buy-to-let properties, either together or separately, in aggregate.”

If you do have 4 or more mortgaged buy-to-let properties, you will find a more paperwork intensive process. The lender may request a business plan, a portfolio spreadsheet, background portfolio stress testing, assets & liability or cash flow forecast.

At Bespoke Finance we help portfolio landlords through the paperwork. We know which mortgage lenders are in favour or not of portfolio landlords.

... read more on Am I a portfolio landlord?

Are buy to let mortgages interest only?

The trend for buy-to-let mortgages has been to go for Interest Only.

With the Government recently removing mortgage interest relief. It can be in your best interest to look at repayment or part-repayment buy to let mortgages. To give you better returns on that investment over the years.

Landlords looking to expand their portfolio may prefer interest-only mortgages. Allowing lower payments, to save for further deposits for further properties, giving higher returns. Known as leveraging.

Whatever your plan our mortgage advisers can obtain for your repayment, part-repayment, interest-only and offset buy-to-let mortgages.

... read more on Are buy to let mortgages interest only?

How do I Compare Mortgages?

With public tools, it is very difficult for you to compare mortgages without the assistance of a mortgage advisor. It is difficult to know what you can or can not qualify for.

Our mortgage advisers will help you assess the market. Find the best mortgage available. With years of personal experience and our knowledge bank, we can disqualify lenders. This helps prevent false starts.

There are many ways to compare the best mortgage for you. Wanting low fees such as low arrangement fees, valuation fees or solicitors fees can be one criteria.

Others may be rate driven, looking for the best mortgage rate. Most landlords are looking to "total to pay" over the initial term. Finding the lowest amount of fees, rates, etc all added up to compare the lowest you will pay over the initial term.

Do I qualify?

There are many qualification criteria such as limits on first-time buyers or buy-to-let experience. It may be personal income or difficulties around self-employed income proof. Others may have issues with credit scores or a variety of other personal criteria.

... read more on Do I qualify?

What rental income is needed?

New regulations limit borrowing based on the rent deemed achievable by the lender's valuer. The minimum is assessed at a rate of 5.5% ensuring a 125% coverage.

As such for a £100,000 mortgage you would need at least £572 rent. Put simply you need £5.72 rent at a minimum for every £1,000 borrowing. That demonstrates the minimum - mortgage lender criteria may be tougher.

... read more on What rental income is needed?

What minimum deposit is needed? (85% LTV Buy to Let Mortgages in 2019)

Mortgages are available up to 85% Loan to Value (LTV) for Purchase or Remortgage. 85% LTV Buy to Let Mortgages are the highest LTV you can get as a property investor.  That's just a deposit of 15% of the property value.

Landlords with larger deposits can enjoy rates up to 2% lower including lower fees, at 80% LTV compared to 85% LTV.

85% Buy to Let Mortgages in 2019 are popular in BTL Mortgage Comparison research allowing landlords use 'leveraging'. The High LTV Buy to Let Mortgage used to purchase more properties compared to a few with a Lower LTV.

The monthly rental amount can limit the maximum loan achievable and therefore requiring higher deposits. Our mortgage advisors can help you release equity from other properties to raise a deposit.

... read more on What minimum deposit is needed? (85% LTV Buy to Let Mortgages in 2019)

What is a buy-to-let mortage?

If you intend to buy (or remortgage) a property to rent it out you will need a buy-to-let mortgage.

The difference compared to a residential mortgage is consent to rent it out. Also the loan amount derives from the rent instead of your personal affordability.

You may need a specific type of mortgage - HMO Mortgages allow you to rent a single house to multiple tenants. A Limited Company mortgage allows you to buy in the name of a company

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