Buy-to-Let Guide

How do buy-to-let mortgages work?

Buy-to-let (BTL) mortgages are for landlords who buy property to rent out. The general rules around buy-to-let mortgages are similar to those of regular mortgages. If you are letting property on a commercial basis, lenders will insist on buy-to-let products rather than standard residential deals.

Common differences between buy-to-let mortgages and ordinary mortgages include:

• arrangement fees tend to be higher;
• interest rates on buy-to-let mortgages are usually higher than standard residential mortgages;
• the minimum deposit for a buy-to-let mortgage can vary between 20%-40%; and
• most BTL mortgages are interest-only.

How much you can you borrow for buy-to-let mortgages?

• The maximum you can borrow is usually linked to the amount of rental income you expect to receive.
• Lenders typically expect the rental income to be 25–30% higher than your monthly mortgage payment.

Most banks and financial institutions now offer BTL mortgages.

Mortgage offers can vary widely and it is often sensible to talk to a mortgage broker before you take out a buy-to-let mortgage, as they will help you choose the most suitable deal for you.

Primus has worked for many years with a number of specialist independent brokers so that our clients are supported throughout the process and have access to the best deals on the market.