Buy-to-Let Mortgages: What Landlords Need to Know

Whether you’re buying your first rental property or growing an existing portfolio, buy-to-let mortgages work quite differently from residential ones. Here’s what to expect.

Bigger deposits, different affordability rules

Buy-to-let lenders typically ask for a minimum deposit of 20–25%, higher than a standard residential mortgage. Instead of assessing affordability mainly against your personal income, most lenders focus on the property’s expected rental income — usually requiring rent to cover 125–145% of the mortgage payment, depending on your tax status and the lender.

Personal name or limited company?

Many landlords now buy through a limited company structure rather than in their own name, largely for tax reasons following changes to mortgage interest relief for individual landlords. The right structure depends on your wider tax position, how many properties you hold or plan to hold, and your long-term plans — it’s worth getting advice before you commit either way.

Growing a portfolio

If you already own rental properties, lenders will look at your whole portfolio, not just the property you’re financing. Options like remortgaging existing properties to release equity for a deposit on the next one are common ways landlords expand without needing large amounts of new cash. Portfolio landlords (usually four or more mortgaged properties) face additional underwriting requirements, so having someone who understands portfolio lending matters.

HMOs and specialist property types

Houses in multiple occupation (HMOs), holiday lets, and student accommodation often need specialist buy-to-let products rather than a standard one — not every lender covers every property type, so this is an area where whole-of-market advice really pays off.

Stamp Duty on additional properties

Buy-to-let purchases usually attract the additional-property Stamp Duty surcharge. Use the Stamp Duty calculator to check the exact cost before you commit to a purchase, and the mortgage calculator to estimate monthly repayments at different rates and terms.

Thinking about your first rental property or expanding a portfolio? See the buy-to-let & portfolio services I offer, or get in touch for tailored advice.