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Buy To Let – Made easy by Mint FS

Buy to let mortgages (BTL) are for landlords who wish to purchase a property to let it out. The rules around these mortgages are similar to normal residential mortgages but there are some key differences.

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Buy to let mortgages explained

Who can get a buy to let mortgage?

Buy to let mortgages (BTL) are for landlords who wish to purchase a property to let it out. The rules around these mortgages are similar to normal residential mortgages but there are some key differences.

  • You want to invest in houses or flats
  • You can afford to take a risk – any investment is a risk which you should carefully consider before entering into
  • Ideally you already own your own home, as this will give you more choice of Buy to let mortgages and lenders – although this is not essential
  • You have a good credit record and are not stretched too much on other borrowing
  • You are over the age of 18 , in some circumstances this is stretched to 21 or even 25 for come types of Buy to let mortgage

Buy to let mortgages are a lot like residential mortgages but with some key differences


  • The fees tend to be higher
  • Interest rates tend to be higher
  • The deposit required to purchase is higher
  • Most Buy To Let mortgages are taken on an interest only basis and affordability is calculated this way
  • The amount you can borrow is linked to the rental amount you receive with a stress test applied


What are the benefits of buy to let?

Many people see property as an attractive investment and it remains a popular option in Britain. Buy to let offers a number of long-term benefits, including:

  • Income from rental
  • The possibility of rents increasing above inflation
  • Potential value growth if property prices increase

If your property’s value rises, you stand to make a profit when you sell, especially if you buy in a booming area. Alternatively, if property prices remain stable, your rental income may be sufficiently high to pay off a large chunk of your mortgage and help build equity in the property.

Of course, there are no guarantees that property values will continue to rise, and you should consider the possibility of your property’s value staying the same over the years, or even decreasing if the market weakens.

Similarly, while rental incomes have grown strongly in certain areas, these may stabilise or drop off as the market shifts. Even if you buy in a high-rent area, your property may remain vacant, meaning you’ll need to cover mortgage payments out of your other income.

If you’re considering taking out a buy to let mortgage, it’s worth weighing up whether the property you’re considering is a good investment.

How to get a buy to let mortgage?

The buy to let mortgage market is quite competitive, but lenders still tend to be more cautious than before the financial crisis of 2007. Lenders will often use the following criteria to decide whether to approve a buy-to-let mortgage:

  • Typically, you’ll need a 25% deposit on the purchase price.
  • For new-build homes, you might be required to put down a 35% deposit, as these are seen as riskier investments by some lenders.
  • Most lenders will ask for evidence that the market rate for rental income is at least 125% of the mortgage repayments

It can also be possible for first time buyers to take out a buy to let mortgage, although this can be a tricky experience depending upon your situation.

Do you qualify for a buy to let mortgage?

In addition to the above criteria, many lenders also insist on you meeting a range of personal criteria. Common factors that are taken into consideration include:

  • Minimum age (often 25+)
  • Minimum income (usually £25,000+)
  • Successful credit check

Additional qualification criteria may apply for landlords looking to put together a portfolio of several properties – this is discussed in the ‘Experienced landlords – Setting up a portfolio’ section of this guide.

How to get the most from buy to let as a landlord

If rental income is your main priority as a property investor, it’s worth trying to maximise your rental yield. Rental yield is calculated by dividing the annual rent you will be earning from the property by the property value, which is then expressed as a percentage. For example:

Annual rent – £24,000
Property Price – £300,000
Yield – (24,000 / 300,000) x100 = 8%

But keep in mind that the rent you earn on the property will also go towards other costs, such as:

  • Mortgage repayments
  • Letting-agent fees
  • Buildings insurance premiums
  • General property maintenance

These costs will reduce the rental yield on the property. For example, if you spent a total of £1,200 per month on the above costs, your net income for the year will fall to £14,400 per year, producing a yield of just over 3%.

Annual rent minus costs – (£24,000 – £14,400) = £9600
Property Price – £300,000
Yield – (9600 / 300,000) x100 = 3.2%

Click here for a handy rental yield calculator

From this 3.2% you will also have to pay income tax. A full guide to tax that may be applicable to landlords can be found below.

You should also factor in the possibility of extended periods without rent – for example, if you struggle to find a tenant.

As this demonstrates, it’s vital to do your sums before embarking on a buy to let mortgage to ensure you are earning enough to make it a worthwhile investment.

Finding the right buy to let mortgage

Finding the right buy-to-let mortgage deal can help you ensure a good return on investment. Since buy-to-let mortgage deals pose a bigger risk to lenders than regular mortgages, they tend to be more expensive. However, you can find the best deals by taking into consideration several factors:

  1. Compare rates – although buy-to-let mortgages do tend to be costlier, good rates can still be found. Taking time to find the right deal can pay off – alternatively use an independent broker like Mint FS to do the work for you.
  2. Deposit amount – the minimum deposit tends to be 25% on buy-to-let mortgages, but putting down a larger deposit can result in a better deal
  3. Type of mortgage – most buy-to-let mortgages are interest only, meaning that you would have to sell the property to clear the loan or make lump sum payments. But repayment mortgages do exist, so you may be able to find the one that’s right for you.


Experienced landlords: setting up a portfolio

Setting up a portfolio of properties can be significantly more complicated than owning a single buy-to-let.

Depending upon who is offering the best deals when you buy each property, you may have mortgages from several different lenders.

Furthermore, lenders can sometimes apply additional limits to borrowings to landlords with several properties, including:

  • Limits on the number of properties on a single mortgage
  • Maximum number of mortgage agreements being offered
  • Maximum number of mortgage agreements being offered from lenders who form part of the same parent company
  • A limit on total amount loaned

Lenders can also have certain reservations on lending, depending on the risks associated with certain property types. Some areas of concern can be:

  • Former local-authority-owned properties
  • New-build properties
  • Studio apartments

Lenders may also take into account the age of the applicant. Some lenders set maximum ages by which they expect the loan to be repaid, normally between 70-90 – this can be an issue if you’re looking for a buy-to-let investment to supplement your income.

Take independent advice

The additional costs that can be associated with buy-to-let mortgages make it crucial to find the best deal for a long-term investment. We know this can be a complicated process, with different borrowers offering different mortgage options and rates.

Our expert mortgage advisers will search thousands of mortgage deals to help pick out the one that’s right for your circumstances, in addition to providing you with all the information you need to make the right decision.

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Mint Mortgages Services

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The legal bit...

Mint FS Limited, trading as “Mint Financial Services” or “Mint FS” is an appointed representative of HL Partnership Limited, which is authorised and regulated by the Financial Conduct Authority. Mint FS Limited is registered in England and Wales with company number 11993128. Registered Office: Unit 6 The Centurion Centre, Castlegate Business Park, Salisbury, Wiltshire, SP4 6QX. The information contained in this website is subject to UK regulatory regime and is therefore intended for consumers based in the UK. Calls may be recorded for training and security purposes and to improve the quality of our services. Mint FS Limited have no control over and are not responsible for the content of other sites. Your home may be repossessed if you do not keep up mortgage payments on it. A fee is payable at outset. We charge a minimum of £395 up to a maximum of 1.5% of the loan amount.