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 4.6%. Repayments: 13 months of £603.00 at 1% (fixed), then 287 months of £897.17 at 4.74% (variable). Total amount payable £268,526.79 which includes interest of £105,326.79. 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.
The Mortgage Works 2 year fixed
Repayment mortgage of £160,000 over 25 years, representative APRC 4.3%. Repayments: 26 months of £616.86 at 1.19% (fixed), then 274 months of £884.77 at 4.74% (variable). Total amount payable £261,665.34 which includes interest of £98,465.34. 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
Available via brokers only.
Additional criteria may apply.
The Mortgage Works 2 year fixed remortgage
Repayment mortgage of £160,000 over 25 years, representative APRC 4.3%. Repayments: 26 months of £620.54 at 1.24% (fixed), then 274 months of £885.20 at 4.74% (variable). Total amount payable £261,878.84 which includes interest of £98,678.84. 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
Remortgage only.
Available via brokers only.
Additional criteria may apply.
The Mortgage Works 2 year fixed cashback mortgage
Repayment mortgage of £160,000 over 25 years, representative APRC 4.3%. Repayments: 26 months of £620.54 at 1.24% (fixed), then 274 months of £885.20 at 4.74% (variable). Total amount payable £261,878.84 which includes interest of £98,678.84. 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
Available via brokers only.
Additional criteria may apply.
Santander 2 year fixed
Repayment mortgage of £160,000 over 25 years, representative APRC 3.1%. Repayments: 27 months of £621.28 at 1.25% (fixed), then 273 months of £773.10 at 3.35% (variable). Total amount payable £229,329.86 which includes interest of £67,830.86. Product Fee (£1,499) 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 Northern Ireland
Are resident of Wales
Minimum income £25,000
Available via brokers only.
Additional criteria may apply.
Godiva Mortgages 2 year fixed
Repayment mortgage of £160,000 over 25 years, representative APRC 4%. Repayments: 27 months of £621.28 at 1.25% (fixed), then 273 months of £863.69 at 4.49% (variable). Total amount payable £254,560.93 which includes interest of £92,561.93. Product Fee (£1,999) 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.
Santander 2 year fixed cashback remortgage
Repayment mortgage of £160,000 over 25 years, representative APRC 3.1%. Repayments: 27 months of £621.28 at 1.25% (fixed), then 273 months of £773.10 at 3.35% (variable). Total amount payable £229,329.86 which includes interest of £67,830.86. Product Fee (£1,499) 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 Northern Ireland
Are resident of Wales
Minimum income £25,000
Remortgage only.
Available via brokers only.
Additional criteria may apply.
Santander 2 year fixed remortgage
Repayment mortgage of £160,000 over 25 years, representative APRC 3.1%. Repayments: 27 months of £621.28 at 1.25% (fixed), then 273 months of £773.10 at 3.35% (variable). Total amount payable £229,329.86 which includes interest of £67,830.86. Product Fee (£1,499) 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 Northern Ireland
Are resident of Wales
Minimum income £25,000
Remortgage only.
Available via brokers only.
Additional criteria may apply.
Coventry Building Society 2 year fixed
Repayment mortgage of £160,000 over 25 years, representative APRC 4%. Repayments: 27 months of £621.28 at 1.25% (fixed), then 273 months of £863.69 at 4.49% (variable). Total amount payable £254,560.93 which includes interest of £92,561.93. Product Fee (£1,999) 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 Direct.
Additional criteria may apply.
BM Solutions 2 year fixed
Repayment mortgage of £160,000 over 25 years, representative APRC 4%. Repayments: 26 months of £625.71 at 1.31% (fixed), then 274 months of £861.00 at 4.44% (variable). Total amount payable £254,177.46 which includes interest of £92,182.46. Product 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 Northern Ireland
Are resident of Wales
Available via brokers only.
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: 7 May 2021
Buy to let mortgages let landlords 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 a number of differences to keep in mind. Buy to let mortgage lenders will take the potential rental income into account when deciding how much money they are happy to lend. In this guide, we cover the key things to know about buy to let mortgages and what to look for in a buy to let mortgage comparison.
How do buy to let mortgages work?
Unlike a standard mortgage, with a buy to let mortgage, lenders take your income into account as well as a percentage of the rental income you will get from letting the property.
Buy to let mortgages tend to be on an interest-only basis, which means that repayments will not go towards repaying the loan and at the end of the buy to let mortgage, it is the cash from the sale of the property that covers the outstanding amount.
Most other mortgages will tend to be on a capital repayment basis, which means you pay back a part of the loan and the interest each month. But with many buy to let mortgages, you only pay the interest on the loan, with the income you receive from the rent yours to keep although many consumers put this into a savings account to help pay back the mortgage at the end of the term.
Other buy to let homeowners use the sale of their property to pay back the mortgage, especially if its value has increased over that period.
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.
Can I get a buy to let mortgage?
Buy to let mortgages are aimed at investors who are typically looking to become landlords and rent out their properties. They are not intended for properties that the borrower plans to live in, which is why the eligibility criteria differ between buy to let and normal mortgages.
Interest rates are often higher on buy to let mortgages than residential mortgages, as buy to let mortgages are seen by lenders as higher risk than residential mortgages.
You will often need a larger deposit for a buy-to-let mortgage than a standard mortgage too, due to the higher risk involved. 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. Unlike a standard mortgage, a buy to let mortgage relies on a third-party to provide you with the money to pay it off.
Find the best buy to let mortgage rates
Buy to let mortgages are commonly interest-only mortgages, which reduces the amount payable on a monthly basis and allows you to keep any income from rent. Repayment BTL mortgages are available, however, if you wish to go down this route.
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.
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 about 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.
Think about the 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.
Account for maintenance - 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 and interest costs 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.