Who can get a buy to let mortgage?

If you’re new to the world of buy to let mortgages, you might wonder who’s eligible for them. This page explains the kinds of things a lender will look at to decide if you’re eligible or not.

People who earn at least £25,000

Most lenders will expect you to have an annual income of at least £25,000 if you’re applying for a buy to let mortgage. They’ll also want proof of your income in the form of recent payslips and a p60.

People with a 25% deposit

Lenders see buy to let mortgages as a bigger risk than standard mortgages, and so they ask for a bigger deposit. Typically, you’ll need to put down at least 25% of the property’s value (e.g. £50,000 on a property worth £200,000).

The more you chip in, the less you’ll have to borrow – which means a lower Loan to Value (LTV) ratio, lower interest rates and lower monthly repayments.

People who can collect enough rent

When you apply for a buy to let mortgage, you’ll be asked how much you rent you expect to collect from your tenants each month. They’ll want to see enough to cover 125% of your monthly mortgage repayments.

For example, if your monthly mortgage repayments were £500, they’d expect a monthly rental income of at least £625.

It’s important to note that buy to let mortgages tend to be interest-only, which means your monthly repayments only cover the interest on the mortgage loan, and not the loan itself.

So, while you need to collect 125% of the repayments in rent, those repayments are likely to be lower than they would be on a mortgage where you pay off both the loan and interest each month.

It is possible to get a buy to let mortgage where you pay off the loan and interest each month, but they’re less common.

People who’ve done their homework

Getting a buy to let mortgage on a property for someone, a couple or a family to live in should be pretty straightforward.

If you’re buying a place in England or Wales and want to rent out rooms separately, however, it’s a bit more involved. In this case you may have to apply for a House in Multiple Occupation (HMO) licence.

The same may be true of student lets, multi-unit freehold blocks and semi-commercial properties with a mix of residential and business space.

It’s important to check with your local council to find out whether or not you need a licence before you apply for a buy to let mortgage.

People of a certain age

The typical buy to let mortgage term is 25 years. Lenders are generally more likely to accept your application if you’re younger than 45, but there are some lenders who accept buy to let investors in their 70s or 80s too.

Eligibility criteria for a buy to let mortgage varies from one lender to the next – that’s why it’s wise to use a broker who understands what each lender will and won’t accept.

Our in-house mortgage advisers can help, and their advice is completely free. To get started, please use our Mortgage Matcher. It takes 15 minutes and shows you what buy to let mortgages you’re eligible for.

After that, you can book a telephone appointment with an adviser to chat through your options.

Other articles you may find useful

How to choose a buy to let mortgage

How much could I borrow for a buy to let mortgage?

Buy to let mortgage rates explained

What is a buy to let yield?