How does a landlord mortgage work?

A buy to let mortgage is a loan secured against a property which you own and intend to rent out to a tenant. You're buying to rent it out, or in other words, you're buying to let.

As with a normal residential mortgage, it's your responsibility to meet the mortgage repayments each month. The big difference is that with a buy to let mortgage, how much you can borrow is based mainly on how much rent the property can earn, rather than your own income – our calculator can give you an idea of what you could borrow . When you have a tenant paying rent, the rental income should cover the cost of the mortgage, ideally with some left over, but that's not guaranteed.

Becoming a landlord is not for everyone, and there are multiple things to consider before getting a buy to let mortgage.

Still, if you want to know how to get a buy to let mortgage, then all you need to do at this stage is scroll down...

How do I get a buy to let mortgage?

Getting a buy to let mortgage can be simple...not easy.

The difference is that it takes a bit of research, time and patience to make the right decision at every phase of the process.

The good news is that you'll learn all about that process on this page. The better news is that we can do most of the hard work for you.

How to choose a buy to let property

There's a high chance you already have a city or town in mind for your property at this point. A lot of landlords prefer to own properties near where they live themselves.

Of course, there are more profitable places in the UK than others. However, if you're living in Manchester then it may not be so wise to buy a property in London. So, you need to consider the balance between feasibility and profitability.

That's where a letting agent comes in.

You can give them your shortlist of preferred cities/towns, your preferred property type and even your preferred type of tenant.

In return, they advise on the most suitable areas and properties for you.

-- Note: If you don't already know what location, property type and tenant type you'd prefer, don't worry - the letting agents are prepared to help you figure those things out too. --

Here are some questions you can expect to nail down (for each potential area) when working with a good letting agent:

  • Does the area have good transport links? Are there any plans to improve these?
  • What about schools, shops and local amenities (cinemas, restaurants, parks etc.)?
  • Is the area 'in demand' right now? Is that demand expected to grow long term?
  • What type of tenants are living in this area today (married couples, students, families on housing allowance etc.)?
  • Is that demographic expected to change any time soon?
  • What type of properties do tenants in this area desire most?
  • Is there a benchmark level of rent I can expect to receive here?
  • Are the majority of letting properties in this area furnished by the landlords?
  • Is there a certain property type which is expected to grow in this area, potentially even to a point of oversupply?
  • Are there any major developments due to begin here within the next 10 years?
  • What's the crime rate like in this area?
Once you know the answers to the above questions (and you'll find there are even more questions when you sit down with the agent), not only will you be able to make a more informed decision on your investment, but you will also have the knowledge to pitch your property to future tenants.


Getting a buy to let mortgage with a broker

The best way to get a buy to let deal is to seek advice from an independent mortgage broker. We would say that because that's what we do, but hear us out for a second...

It's our job to know the buy to let market inside and out and to use that knowledge to help find you the right deal with the right lender. As independent advisers, we search across the market, giving you a clear picture of the very best offers available right now.

The 5 step process of getting a buy to let mortgage

  1. Do some initial research on the type of property you want to buy and the area you want to buy in
  2. Think about your budget including how much you deposit you can put down and how much rent you might be able to earn. Use our calculator to see how much rent you should charge (link to rent calc)
  3. Compare the best buy to let mortgages here
  4. Get in touch with us free on the number below
  5. Then all you need to do is discuss the details with us, and make a decision about whether or not you want to proceed. There's no obligation and no fee for our advice.
If you're happy to go ahead, we'll also help you apply for and set up your new mortgage, saving you time and hassle.

Please note: although L&C is authorised and regulated by the Financial Conduct Authority (FCA), the FCA does not regulate most Buy to Let mortgages.

 

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