Buy to let
Why are you looking for a mortgage?
The Mortgage Works 1 year fixed for existing borrowers
Repayment mortgage of £160,000 over 25 years, representative APRC 4.7%. Repayments: 13 months of £631.66 at 1.39% (fixed), then 287 months of £898.88 at 4.74% (variable). Total amount payable £269,390.14 which includes interest of £106,190.14. Arrangement fee of £3,200. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Scotland
Are resident of Wales
Existing borrowers only.
Available Direct.
Available to existing borrowers not moving only.
Additional criteria may apply.
Furness Building Society 2 year discount cashback mortgage
Repayment mortgage of £160,000 over 25 years, representative APRC 5.1%. Repayments: 24 months of £646.69 at 1.59% (discount), then 276 months of £967.41 at 5.64% (variable). Total amount payable £283,520.72 which includes interest of £122,525.72. Application Fee (£995) paid upfront. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Scotland
Are resident of Wales
Available Direct.
Additional criteria may apply.
The Mortgage Works 2 year BBR tracker
Repayment mortgage of £160,000 over 25 years, representative APRC 4.3%. Repayments: 26 months of £650.48 at 1.64% (bbr tracker), then 274 months of £888.60 at 4.74% (variable). Total amount payable £262,383.88 which includes interest of £100,388.88. Arrangement Fee (£1,995) with an option to add to the loan. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Scotland
Are resident of Wales
Available via brokers only.
Additional criteria may apply.
Principality Building Society 2 year discount
Repayment mortgage of £160,000 over 25 years, representative APRC 4.1%. Repayments: 28 months of £655.04 at 1.7% (discount), then 272 months of £879.94 at 4.65% (variable). Total amount payable £257,684.80 which includes interest of £97,684.80. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Wales
Available Direct.
Minimum income £20,000
Self employed not accepted.
Additional criteria may apply.
Hinckley & Rugby Building Society 2 year discount
Repayment mortgage of £160,000 over 25 years, representative APRC 5.6%. Repayments: 24 months of £655.04 at 1.7% (discount), then 276 months of £1,017.32 at 6.19% (variable). Total amount payable £297,750.28 which includes interest of £136,501.28. Application Fee (£250) paid upfront (non-refundable). Completion Fee (£999) with an option to add to the loan. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Wales
Available Direct.
Minimum income £25,000
Additional criteria may apply.
The Mortgage Works 2 year BBR tracker remortgage
Repayment mortgage of £160,000 over 25 years, representative APRC 4.4%. Repayments: 26 months of £658.10 at 1.74% (bbr tracker), then 274 months of £889.43 at 4.74% (variable). Total amount payable £262,809.42 which includes interest of £100,814.42. Arrangement Fee (£1,995) with an option to add to the loan. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Scotland
Are resident of Wales
Remortgage only.
Available via brokers only.
Additional criteria may apply.
The Mortgage Works 2 year BBR tracker cashback mortgage
Repayment mortgage of £160,000 over 25 years, representative APRC 4.4%. Repayments: 26 months of £658.10 at 1.74% (bbr tracker), then 274 months of £889.43 at 4.74% (variable). Total amount payable £262,809.42 which includes interest of £100,814.42. Arrangement Fee (£1,995) with an option to add to the loan. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Scotland
Are resident of Wales
Available via brokers only.
Additional criteria may apply.
The Mortgage Works 2 year BBR tracker
Repayment mortgage of £160,000 over 25 years, representative APRC 4.8%. Repayments: 26 months of £658.10 at 1.74% (bbr tracker), then 274 months of £931.78 at 5.24% (variable). Total amount payable £274,413.32 which includes interest of £112,418.32. Arrangement Fee (£1,995) with an option to add to the loan. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Scotland
Are resident of Wales
Available via brokers only.
Additional criteria may apply.
Monmouthshire Building Society 2 year discount for existing borrowers
Repayment mortgage of £160,000 over 25 years, representative APRC 4.5%. Repayments: 24 months of £661.93 at 1.79% (discount), then 276 months of £912.71 at 4.99% (variable). Total amount payable £267,794.28 which includes interest of £107,794.28. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Wales
Existing borrowers only.
Available Direct.
Minimum income £25,000
Available to existing borrowers not moving only.
Additional criteria may apply.
Principality Building Society 2 year discount
Repayment mortgage of £160,000 over 25 years, representative APRC 4.1%. Repayments: 28 months of £662.70 at 1.8% (discount), then 272 months of £880.83 at 4.65% (variable). Total amount payable £258,141.36 which includes interest of £98,141.36. Early repayment charges apply. Fees are assumed to be paid upfront. Other fees may apply.
Eligibility
You must meet the following criteria in order to get this loan:
Are resident of England
Are resident of Wales
Available Direct.
Minimum income £20,000
Self employed not accepted.
Additional criteria may apply.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
What is a buy to let mortgage?
Last updated: 29 October 2021
Buy to let mortgages allow landlords to borrow money specifically to buy a property for the purpose of renting it out. They work in a similar way to a residential mortgage, but there are some key differences. Buy to let mortgage lenders take the potential rental income of a property into account when deciding how much money they are happy to lend. In this guide, we cover the key things you need to know about buy to let mortgages and what to look for when comparing buy to let mortgages.
How does a buy to let mortgage work?
Most residential mortgages tend to be repaid on a capital repayment basis, which means you pay back a part of the loan as and the interest each month.
However, buy to let mortgages tend to be repaid on an interest-only basis, which means you only pay the interest on the loan. At the end of the buy to let mortgage, you will need to find the cash to cover the outstanding capital or take out a new mortgage. Many borrowers use the income received from the rent or the cash from the sale of the property to help pay back the mortgage at the end of the term.
Buy to let mortgages are available as fixed, discounted and tracker deals and arrangement fees are normally around 1.5% to 2% of the mortgage.
Should I get a buy to let mortgage?
If you're looking to purchase a property solely for the purpose of renting it out, a buy to let mortgage is likely the most appropriate option for you, although eligibility criteria differs between buy to let and normal mortgages.
Lenders will take many things into consideration, including:
Rental yield - lenders take your income into account as well as a percentage of the rental income you will get from letting the property
Interest rate affordability - buy to let mortgages often have higher interest rates than residential mortgages, as buy to let mortgages are seen by lenders as higher risk
Deposit size - you will need a larger deposit for a buy-to-let mortgage than a standard mortgage. Most lenders will require a deposit of between 20% and 40% of the property purchase price
The risk for the bank is that your tenant may stop paying rent, or you may struggle to find someone to rent the property.
Should I get an interest only buy to let mortgage?
A lot of landlords opt for interest only and use the rental income to invest in other properties, choosing to pay back the entire mortgage through the sale of the property at a later date.
If you choose interest only you will need to make sure you can afford to pay the whole mortgage back when the buy to let mortgage term ends.
How do I know the best buy to let mortgage rates?
As with a regular mortgage, the interest rate available will depend on the deposit you provide. To find the best buy to let mortgage rates available and determine how much you can borrow, use our buy to let mortgage calculator above.
How to compare buy to let mortgages
The mortgage interest rate you get is vital so it’s important to compare rates and look for the cheapest mortgage that fits your requirements. Shop around, carry out a buy to let mortgage comparison and make sure you’re getting a competitive rate.
When you compare buy to let mortgages consider the length of the fixed rate you’ll be getting and the cost of arranging the mortgage, as well as your monthly repayments versus the overall amount you’ll be paying.
What are consumer buy to let mortgages?
Consumer buy to let mortgages are regulated as residential mortgages and are aimed at ‘accidental’ or non-professional landlords.
You cannot apply for a consumer buy-to-let mortgage if:
You are buying a new property with the intention to let it out
You are a professional landlord
You already own multiple properties you let out
You should be eligible for a consumer buy-to-let mortgage if:
You did not buy the property (or are not buying a new property) with the intent to let it out
Letting out property is not your main job
You or a relative have previously lived in the property
You don’t own any other properties that are currently being let out
Note that Uswitch does not currently compare consumer buy-to-let mortgages. To find out more read our guide on consumer buy-to-let.
Top tips for buy to let mortgages
Be careful
Buy to let mortgages are risky; make sure you’ve done your sums and you know what you’re letting yourself in for. Research the market to get an idea of how much demand there is for renting in the area you’re buying in.
Consider the buy to let rental market
Don’t buy a property that you like, buy a property that the kind of tenant you want to attract will actually want to rent. Consider any legislation that the government is planning to introduce that may help or hinder your property’s attractiveness to potential tenants.
Location, location, location
The old property cliché. However, choosing the right location will make or break a buy-to-let deal.
Do your research and find out what the rental market is really like in the area you’re looking at. An area with valuable properties may not be the best for you if people are unwilling to pay the rent associated with it, so weigh in a range of factors.
Make sure you can afford to maintain the property
You need to make sure you can cover all the costs of maintaining the property. Buying somewhere run-down or with a big garden will increase those maintenance costs.
A modern build may have less maintenance but the list price can sometimes be inflated, so consider what tenants are likely to be willing to pay to rent your property versus the day-to-day cost of running the property.
Remember the tax
Remember you will have to pay tax on gains in the value of the property when you sell it, but expenses like agent fees can be offset against rental income.
Don’t forget letting agent fees
If you use an agent, they will charge 15-20% of the rental income to manage your rental properties. This could make managing the property easier and leave the day-to-day dealings with your tenant to them, but decide whether the costs outweigh the potential disadvantages of doing it all yourself.
Time is money
If you’re not going to use a letting agent, take a look at how much of your time it will occupy into consideration. Maintenance, viewings, posting ads and collecting payments all take time. It could also make finding the right tenant a little harder, which could cause you problems down the line if they have trouble paying the rent on time or maintain the property well enough.
Think long-term
Buy to let probably isn’t a good short-term investment, you may have to be patient and wait a number of years before you start to see returns. Putting down a higher deposit could earn you lower buy to let mortgage rates, but either way, the returns won’t be coming in very quickly. Decide whether you can afford to be without a large sum of money for a long period and then consider how much and how long.
Uswitch is authorised and regulated by the Financial Conduct Authority (FRN 312850) to provide this mortgage comparison service.
Uswitch services are provided at no cost to you, but we may receive a commission from the companies we refer you to.