For new landlords, existing landlords and portfolios. We explain how lenders assess a rental property and where limited company buy-to-let fits in.
Whether it is your first rental property or the latest in a portfolio, here is how buy-to-let mortgages work.
A buy-to-let mortgage is for a property you intend to rent out rather than live in yourself. Lenders assess these applications differently from a residential mortgage, focusing more heavily on the rental income the property is expected to achieve alongside your own income and circumstances.
Buy-to-let mortgages are available to first-time landlords as well as people who already own rental property, though some lenders ask for a minimum income or for you to already own your own home. Requirements vary between lenders, which is where advice makes a difference.
Buy-to-let mortgages typically ask for a larger deposit than a residential mortgage, often 25% or more.
If you already own rental property, lenders will look at your existing portfolio alongside the new application. Once you reach four or more mortgaged properties, you are usually classed as a portfolio landlord, which comes with its own lending criteria and additional paperwork.
Like residential mortgages, buy-to-let deals come to an end and need reviewing. Remortgaging a rental property can mean a better rate, releasing equity for another purchase, or simply avoiding a lender's standard variable rate.
Some landlords choose to hold rental property through a limited company rather than personally, which can suit certain circumstances, particularly for portfolio landlords.
We look at your circumstances, whether you are buying your first rental property or adding to a portfolio, and explain the buy-to-let options that may be available. Eligibility always depends on your circumstances and individual lender criteria.
The questions we hear most from landlords and property investors.
Speak to an adviserIt is a mortgage for a property you intend to rent out rather than live in. Lenders assess these differently to residential mortgages, weighing the expected rental income alongside your own circumstances.
Typically at least 25% of the property value, sometimes more depending on the lender and the property. A larger deposit generally opens up a wider range of deals.
Lenders check that the expected rent covers the mortgage payment by a set margin, rather than relying mainly on your personal income. The exact calculation varies between lenders.
Yes, though some lenders ask first-time landlords to already own their own home, or set a minimum personal income. Requirements vary, so it is worth checking what applies to your situation.
It depends on your circumstances, particularly if you have a portfolio. We keep tax guidance general and would always recommend speaking to an accountant or tax adviser about your personal position before deciding.
Yes, buy-to-let deals come to an end like any other mortgage. Remortgaging can mean a better rate, releasing equity, or simply avoiding your lender's standard variable rate.
Rental income is generally taxable, but the details depend on your personal circumstances and how the property is owned. This is a question for an accountant or tax adviser rather than a mortgage adviser, and we would always recommend seeking that advice.
Whether you are buying, moving, remortgaging or you simply want to understand your options, speak to the ICE Mortgages team. No jargon, no pressure, just a straight conversation about what is possible.