MORTGAGES
BUY TO LET
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Your property may be repossessed if you do not keep up repayments on your mortgage.
Some buy to let mortgages are not regulated by the Financial Conduct Authority.
Buy To Let mortgages, putting you in the know
When you want to buy a residential property to rent out for profit, you will need to apply for a Buy to Let mortgage. Properties with a Buy to Let mortgage in place can not legally be used as your own residence. However, where you already own a residential property and wish to start letting it out to tenants, you can sometimes request to change your mortgage to Buy to Let with your existing lender gaining consent to let the property depending on your terms or remortgage the property onto a new Buy To Let mortgage.
Who can get a Buy to Let Mortgage?
In order to obtain a Buy to Let mortgage, you will ordinarily have to fulfil the following criteria:
- In most cases you will already need to be a homeowner (having an active residential mortgage is fine)
- Some lenders may require you to meet a minimum salary requirement, usually around £25k.
- Most lenders will be looking for a strong credit score
- Lenders usually require a 20% deposit as a minimum.
How does a Buy to Let mortgage differ from a standard residential mortgage?
A Buy to Let mortgage differs from a traditional residential mortgage in a number of ways, beyond the additional acceptance criteria. For example, they tend to have a higher deposit requirement of 20+%.
The application fees and mortgage interest rates are also higher than on a standard residential mortgage. As most Buy to Let mortgages are taken on an interest only basis, the monthly repayments will often be much lower, offering some balance. The lump sum of your loan will then be paid at the end of the mortgage term, often utilising the sale of the property.
It should be noted that some Buy to Let mortgages are not regulated by the Financial Conduct Authority (FCA) unless you buy a property expressly to let it to close family members.
How much can you borrow on a Buy to Let Mortgage?
Another way that a Buy to Let mortgage differs is in how the lender calculates your loan amount. Unlike other mortgage types, which are based predominantly on affordability, the amount you can borrow is based on your potential rental yield (income from the rental achieved from the property).
This means that lenders will pay close attention to your choice in property, which they will usually be looking to produce a rental yield to cover your monthly mortgage payments, based on a higher stress-tested rate and a lender specific margin. Therefore, the amount you can borrow will be based largely on the rentability of your chosen property.
Planning for when no rent is coming in
A Buy to Let property can be a great way to bring in a stable monthly income. When planning to apply for a mortgage, however, it’s important to consider periods of vacancy. All rental properties will be empty at some stage, whether it’s during renovation or as a result of a slow local market.
As you’ll still need to meet your mortgage repayment whilst your property is vacant, it’s a good idea to look for a high-end rental protection policy. This type of insurance often covers a lack of rental income resulting from a variety of circumstances.
Don’t rely entirely on a property sale to finalise the mortgage
It’s standard practice for landlords to sell their Buy to Let mortgage at the end of the mortgage term, in order to pay off the final lump sum. Whilst this can be profitable in some cases, there are many situations where this is not an option.
Having a backup plan to cover the lump sum in the event of a drop in house prices, for example, could help you find extra funds where the sale amount is too low.
The tax implications and advantages of a Buy to Let Property
There are many tax implications to consider before applying for a Buy to Let mortgage:
- There is a 5% additional stamp duty requirement on Buy to Let properties
- Income tax is payable on rental income
- Both capital gains and income tax are payable on the proceeds of sale when you sell the property.
With regards to the income tax owed, there may be some property associated costs you can offset against your income tax liability, but we would recommend speaking to a qualified accountant or tax adviser for personalised advice on this.
Are there any differences when you apply for a Buy to Let Mortgage as a Limited Company?
A Buy to Let mortgage is available to both individual landlords and Limited Company owners. In order to apply for a mortgage through a limited company, lenders will usually require that you use a Special Purpose Vehicle.
Special Purpose Vehicles
A Special Purpose Vehicle (SPV) is a type of limited company that is set up specifically for the purpose of buying property. This is easy to set up by both individuals and existing Limited Companies. There are benefits and drawbacks to using a Special Purpose Vehicle:
Benefits:
No limit on the number of properties owned, allowing portfolio landlords better opportunities to expand
- Stress tests are more relaxed, so mortgages can be easier to obtain
- Some lenders will consider personal income alongside potential rental yield in their loan calculation
- Certain tax benefits (see below*)
*There are different tax rules applied to Buy to Let income depending on whether you are trading as an individual landlord or a limited company.It’s worth considering which method of application will be more beneficial to your long term earning ability prior to application. We recommend speaking to a qualified tax professional for further advice.
Drawbacks:
- They can be more expensive to arrange
- More detailed and complex application process
- Fewer choices of mortgage lender (although this is gaining popularity)
- The director of the Limited Company will need to provide a personal guarantee on the mortgage
Your home/property may be repossessed if you do not keep up repayments on your mortgage.
Some Buy-To-Let Mortgages are not regulated by the Financial Conduct Authority.
Happy Clients
Jyoti Bains2026-04-02I’ve known Mohit for past so many years, and in that time I’ve seen firsthand just how dedicated, honest, and knowledgeable he is, both professionally and personally. As a mortgage advisor, Mohit goes above and beyond. He takes the time to really understand your situation, explains everything clearly (no jargon or pressure), and make what can feel like a stressful process so much smoother and more manageable. What really stands out is his integrity, you genuinely feel he has your best interests at heart. It’s rare to find someone who combines expertise with such a personal touch. Whether you’re a first-time buyer or remortgaging, you’re in very safe hands. Highly recommend to anyone looking for trustworthy, reliable mortgage advice!
Dripesh Chauhan2026-03-26I would like to thank you Mortgage Matchmakers in helping out the mortgage for our second home. Specially I would like to thank you Bhavna for her dedication and professionalism during the process. I will highly recommend Bhavna of Mortgage Matchmakers Limited for anyone looking for a mortgage. Dripesh & Reena
Jaya Bhardwaj2026-03-17Our experience with Bhavna from mortgage matchmakers has been absolutely fantastic. We have been using her for a while now to get mortgages on several of our properties, including buy to let properties purchased through our limited company and she has always managed to find fantastic deals for us. What particularly stands out is her communication, prompt responses to any queries and her efficiency. Even after the mortgage is approved, she constantly keeps looking to see if any better deals arrive on the market and lets you know if this is the case. She manages everything for you and we have never had any issues with any of the mortgage deals she has sorted for us. Doing business with her is a great pleasure and I would highly recommend Bhavna at Mortgage matchmakers for all of your mortgage needs.
Avanish Tantry2026-03-17I have used Mortgage Matchmakers for several mortgages now and am very happy with their service. Bhavna Grover, who has been our mortgage advisor, is excellent and I can’t recommend her enough. She is professional, very hard working, extremely prompt with her responses and gets things done in super quick time. She has always managed to find really competitive deals for me, including limited company but to let mortgages, and keeps looking out for better deals right till the end. I couldn’t ask for anything more and she completely takes the stress and hassle out of obtaining mortgages. If you are looking for a mortgage advisor and company, look no further than Bhavna and Mortgage Matchmakers.
Richard Smith2026-03-11Mohit was very professional and clearly has a good knowledge of the mortgage market. He was able to secure us a rate ahead of the increase that came in 8 hours later! Would highly recommend for all mortgage related enquiries.
Michael Wheller2026-03-04Excellent service and useful advice all the way through the process of setting up the new mortgage.
Julianaa Raghu2026-02-18I had an exceptional experience working with Mohit Mehra. As a first-time buyer, I was nervous about the process, but Mohit made everything feel straightforward and stress-free. He was incredibly responsive, patient and always answering my questions quickly and explaining complex terms in plain language. The communication was exceptional. I felt they truly had my best interests at heart and went above and beyond to ensure a smooth closing. I highly recommend their services to anyone looking for a reliable and professional mortgage broker!
Hameed Wahedi2026-02-01I was dealing with Ankur for my remortgage and I am highly recommend him to anyone looking to buy or remortgage their property. Thanks
Sope Famo2025-11-21Mohit from Mortgage Matchmakers was a pleasure to work with, making the process as simple as it could have ever been and was always on call to answer any questions. He was super helpful and impressively quick, which is rare when it comes to securing a property/mortgage. Thanks to Mohit we've had our mortgage approved and can move on to the next steps. I would highly recommend Mohit due to reliability and speed along but also his friendliness! Thanks a lot Mohit!!
Angela Kibia2025-11-20We had an excellent experience working with Mohit Mehra at Mortgage Matchmakers. From the beginning he was professional and very supportive. He made the whole process smooth as his communication was amazing. He was always quick to respond and provided updates. Thanks to Mohit we received a successful mortgage offer! We highly recommend Mohit to anyone looking for a reliable mortgage broker.