Discover your next buy to let mortgage rate

While every mortgage lender will have their own criteria for determining how much you can borrow, they all look at the following key factors when calculating a buy to let mortgage: 

• Loan to Value (LTV) 

This is how much you are borrowing expressed as a percentage of the property value. Generally speaking, a lower LTV gives you access to more competitive mortgage interest rates and a higher LTV reduces the number of lenders available to you and usually increases the rates. 

The majority of buy to let lenders cap their maximum loan amount to 75%. This means that even if you meet affordability criteria to borrow more, the most amount of funding you could access will still be up to 75% of the property value. 

• Rental Income 

Buy to let properties should be self-funding and your mortgage product should be affordable for your current circumstances. As such, the rental income should cover the mortgage interest repayments plus any additional costs associated with running the property. 

When lenders are stress-testing your affordability, they will typically use a ICR of 145% at payrate (the mortgage rate) for individual borrowers and 125% for Limited Companies.

There are three main factors to consider when comparing buy to let mortgage rates, and the headline interest rate isn’t one of them! 

Criteria 

Lender criteria can vary significantly from provider to provider. While you may be a perfect applicant for one, another may not accept your circumstances at all. As such, working with one of our experienced brokers who has a thorough understanding of the buy to let market space can save you time and money, as they will only recommend lenders who they’re confident will accept your application and meet our standards of service. 

Costs 

The true cost of the mortgage is more than just the initial rate you source. You should always consider the arrangement and valuation fees, as well as the legal costs, alongside the interest rate pricing. We can help you compare the total cost of borrowing during the initial rate period of different mortgage products to ensure you secure the most competitive option. 

Hidden quirks 

Some products will have quirky additional terms, such as exit charges extending beyond the fixed rate period, which may catch you out once it’s too late. Ensure you carefully read over all the mortgage documents and speak to your broker to be confident in your mortgage application. 

A buy to let mortgage is a loan secured on a residential property with the specific aim of letting it out to tenants.

Our free buy to let mortgage calculator is a great tool for anyone looking to purchase or remortgage an investment property. With very little information from you, the calculator gives you a selection of buy to let mortgage interest rates that you could access. Just tell us: 

• The property value and LTV
• How much you want to borrow, and for how long
• The property type
• Whether it’s a purchase or remortgage transaction
• The monthly rent  

Then, you can start searching for your next deal.