Compare BTL Mortgage Rates
Looking for a buy to let mortgage? Use the rate finder and calculator below to search for the most suitable rates for your circumstances.Buy to let explained
- New buy to let landlords & investors
- Portfolio landlords
- Landlords investing via a limited company
- HMO landlords
|1.79%||3.0%||Fixed||5 year term.||£150,000||£725||£1,499||£226||£751||75%||3.35% (SVR).||Get a quote|
|1.79%||4.0%||Fixed||2 years to 28/02/2024.||£150,000||£688||£1,495||£226||£751||75%||4.09% (SVR).||Get a quote|
|1.82%||4.0%||Fixed||2 years to 28/02/2024.||£150,000||£688||£995||£229||£751||75%||4.09% (SVR).||Get a quote|
|1.89%||4.0%||Fixed||2 years to 28/02/2024.||£150,000||£688||£1,495||£238||£759||75%||4.09% (SVR).||Get a quote|
|1.92%||4.0%||Fixed||2 years to 28/02/2024.||£150,000||£688||£995||£241||£758||75%||4.09% (SVR).||Get a quote|
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Buy to Let Mortgages
What is a Buy to Let (BTL) Mortgage?
These mortgages are designed for anyone who wants to buy a house, flat or property to rent it out to tenants. It is different from a standard residential mortgage and is a useful tool for property investment, whether you are an experienced landlord or just starting out
How Does a Buy to Let Mortgage Work?
Buy to let mortgages usually carry higher fees and interest rates than standard residential mortgages. They have slightly different eligibility requirements, and applicants need to be able to put down a deposit of 15-40% of the property’s value. Most BTL mortgage lending is not regulated by the Financial Conduct Authority (FCA). However, there are some situations where regulation would apply, for example, if you want to let out your existing residence and purchase a new home.
Different Types of Buy to Let Mortgages
There are two types of BTL mortgage options:
- Interest-only loan – This is the preferred option for most property investors. You only pay the interest on the loan each month, and the capital debt (the original mortgage amount) is only paid at the end of an agreed-upon term.
- Capital repayment loan – This option works similarly to a residential mortgage, where you have standard repayments each month according to an interest rate, and the property is fully paid off over the period.
In addition, your mortgage can vary in terms of the interest rate
- Fixed interest rate – The interest rate is set in the terms of your contract and is not affected by external factors. The longer the term of the mortgage, the higher the fixed interest rate.
- Discount variable – The lender’s standard variable mortgage rates are applied to your contract along with a set discount. The interest rate will fluctuate, but the discount stays constant.
Tracker mortgage – The interest rate is set at a percentage above the variable rate. As the Bank of England’s base rate changes, so your interest rate changes to match it.
How Much Can I Borrow?
This is primarily dependent on how much you expect to earn through renting the property. Lenders typically want to see a rental income that is 20-30% above the mortgage repayment, as this shows that their investment is secure. As a result, it is essential to factor this into your property search by speaking to letting agents and evaluating rentals in different areas.
BTL Mortgage Fees and Costs
There are several fees and costs associated with a BTL mortgage, including arrangement fees, booking fees, valuation fees, CHAPS fees, account fees, exit/mortgage closure fees, and a mortgage broker fee (should you hire one). In addition, depending on the lender and the mortgage amount, you may incur higher lending charges if you have a smaller deposit, building insurance fees, and early repayment fees. You should also consider fees specific to your region, including Stamp Duty in England and Northern Ireland, Land Transaction Tax in Wales, legal and survey fees in Scotland, and Land and Buildings Transaction Tax in Scotland.
Who Can Get a BTL Mortgage?
To be eligible for a BTL mortgage, you need to meet the following criteria:
- You want to buy an investment property to rent to tenants
- You have a good credit record
- You have the necessary income after paying off other debts (credit cards, residential mortgage, etc.) to manage the new mortgage payments
- You earn £25,000 per year (it is possible to get a BTL mortgage if you earn less than this, but it does become more challenging)
Tax Implications of BTL Mortgages
Investing in property has tax implications, including Capital Gains Tax on the sale of second properties for profit, and income tax on the rental income you earn from the property. It is important to note that landlords are no longer allowed to deduct mortgage interest from rental income to reduce tax. Instead, you will receive a tax credit. It’s best to speak to a professional tax adviser to see how the tax implications may affect you.
How to Find the Best Mortgage Deal
Buying a property is often one of the biggest investments you’ll ever make, and it’s essential to get good advice when looking for BTL mortgage deals. Like all financing, it can be a complex undertaking, and slight differences in offers can have a significant impact over the years. When looking at different mortgage offers, be sure to add up all the monthly costs as well as the costs over the entire term of the mortgage to make sure you have a clear idea of your payments now and in the years to come. Your mortgage broker can be a great help in properly evaluating offers and helping you find one that is the perfect fit.
Why Use a Broker for a Buy to Let Mortgage?
If you are interested in buying an investment property using a BTL mortgage, it’s advisable to use a broker as they have the network and expertise to source the most affordable and competitive rates on BTL mortgages. They can assist you with assessing your eligibility, finding BTL mortgages that are more flexible in terms of their eligibility criteria, and much more. A broker is there to help you on your property investment journey, ensuring you navigate your options and find the best possible deal.