Buy to Let - Godfreyfs

Live first time buyer mortgage deals

Based on a mortgage of £250,000 at 50% LTV

What is a buy to let mortgage?

A buy to let mortgage is designed for people who want to purchase a property as an investment and rent it to tenants rather than live in it themselves.

The amount you may be able to borrow usually depends on factors such as the size of your deposit, the expected rental income from the property, and the lender’s individual criteria.

Are buy to let mortgages interest only?

Many buy to let mortgages are arranged on an interest-only basis. This means that monthly payments normally cover the interest on the loan, while the original loan amount is repaid at the end of the mortgage term.

Some lenders may also offer repayment mortgages for buy to let properties, where both the loan balance and interest are paid off through monthly instalments.

How do lenders assess affordability?

When assessing a buy to let mortgage application, lenders usually review the expected rental income from the property as well as your personal financial situation.

Many lenders require the rental income to cover a certain percentage above the mortgage interest payments, although requirements vary between lenders.

Mortgage calculators can provide a general estimate of borrowing potential, but the exact amount available will depend on individual circumstances and lender criteria.

Am I eligible for a buy to let mortgage?

Eligibility requirements for buy to let mortgages vary between lenders, but common considerations may include:

Age: Many lenders require applicants to be over a certain age, often around 21 or 25.
Residency status: Some lenders require applicants to live in the UK, although certain lenders may consider overseas applicants.
Credit history: Lenders will normally review your credit history when assessing an application.
Property ownership: Some lenders prefer applicants who already own their own home.
Personal income: Some lenders require applicants to have a minimum level of personal income in addition to rental income.

A mortgage adviser can review your individual circumstances and explain what options may be available.

How to arrange a buy to let mortgage

Arranging a buy to let mortgage involves reviewing your financial circumstances and identifying lenders that offer suitable mortgage products for investment properties.

While some investors arrange mortgages independently, many choose to work with a mortgage adviser who can help explain the available options and the steps involved.

How the buy to let mortgage process works

1. Understanding your plans

The process usually begins with a discussion about your property investment plans and financial circumstances.

2. Preparing documentation

You may be asked to provide documents such as identification, proof of income, and details of the property being purchased.

3. Submitting the mortgage application

Once a suitable mortgage option is identified, a full application can be submitted to the lender for assessment.

4. Lender checks and valuation

The lender will review the application and usually arrange a valuation of the property to confirm its suitability for lending.

5. Mortgage offer and completion

If the lender approves the application, a formal mortgage offer is issued and the legal process continues until the purchase is completed.

Why choose Godfrey Financial Solutions for buy to let mortgage advice?

Investing in property can involve complex financial decisions. Our adviser aims to provide clear information and guidance to help you understand the options available.

Qualified mortgage adviser: Our adviser holds recognised qualifications including CeMAP and DipFA.
Regulated advice: Godfrey Financial Solutions Ltd is an Appointed Representative of Rosemount Financial Solutions (IFA) Ltd, authorised and regulated by the Financial Conduct Authority.
Professional standards: We maintain professional standards through memberships including the Chartered Insurance Institute (CII) and the Wallbrook Institute London.
Guidance throughout the process: We aim to help clients understand the mortgage process and the options available when purchasing an investment property.

Buy to let mortgage FAQs

Here is a selection of the most common questions our buy to let mortgage advisers are asked.

How much can I borrow for a BTL mortgage?

The maximum amount you can borrow depends on the size of your deposit and the amount of rental income you expect to make. Lenders typically require the rental income to be 25-30% higher than your mortgage amount, so that there’s less risk of you being unable to cover your payments. Use our buy to let mortgage calculator to calculate an estimate of how much you could borrow based on your expected rental income.

Are buy to let mortgages more expensive?

BTL mortgages can be more expensive than residential mortgages. Lenders require larger deposits as they see view buy to let mortgages as being riskier because the loan is based on potential rental income rather than your personal income. Interest rates are often higher, which can make your monthly payments more expensive. You also face additional costs as a landlord, such as letting agent fees and higher taxes. Our specialist brokers can help you consider all the costs involved in taking out a buy to let mortgage so you can make the most informed decisions for your investment.

What fees are there for a BTL mortgage?

As well as interest rates, it’s important to compare the different fees charged on buy to let mortgage deals, as they can increase your overall costs. These include but aren’t limited to:

Arrangement fees – charged for setting up the mortgage, either as a fixed amount or a percentage of the loan
Valuation fees – a fee for the lender to assess the property’s value to determine how much they’re willing to lend
Legal fees – solicitors or conveyancers charge these for handling the legal aspects of the property purchase

Our expert brokers are well-versed in calculating the overall cost of taking out a BTL mortgage, helping you find the best deal for your budget.

What taxes do I need to consider before getting a BTL mortgage?

Yes, you need a BTL mortgage for renting. You’ll breach the terms of your residential mortgage if you rent it out unless you get the lender’s consent. You can only rent a property without a buy to let mortgage or the lender’s consent if you own the property outright.

Can first-time buyers get a buy to let mortgage?

Yes, first-time buyers can get a BTL mortgage. But you should expect higher rates, a larger deposit and stricter lending criteria. You also won’t qualify for first-time-buyer stamp duty land tax (SDLT) relief, as you won’t be living in your first property.

Purchasing a buy to let as a first-time buyer could also make it more difficult for you to get a residential mortgage when you buy your first home, as lenders will assess any debt you have outstanding on your BTL mortgage for your application. You’ll also have to pay the full second (SDLT) surcharge.

If you’re a first-time buyer, our expert brokers can help you understand your options and meet lender criteria should you decide to go ahead.

Can I change my mortgage to buy to let?

Yes, you can switch your mortgage to buy to let. It’s crucial you do this before renting out a property on which you have a residential mortgage. You would breach your mortgage agreement if you didn’t, which could put you at risk of having your property repossessed.

Alternatively, you could ask your lender for their consent to let, which they might agree to for a set period of 6-12 months. This can be a good short-term solution, especially if you might want to use the property for residential purposes again in the future.

How to change my mortgage to buy to let?

Your home may be repossessed if you do not keep up repayments on your mortgage.
The Financial Conduct Authority do not regulate buy to let mortgages.