A ‘Buy-to-let’ mortgage is specific to individuals (or companies) who are buying a property with the purpose of renting it out for a profit. We have all seen numerous television shows, normally in the mid-morning, where developers pick up properties for a song, ‘flip’ them and then rent them out. For many people this is their sole source of income and many successful individuals have substantial ‘portfolios’. Of course, embarking on a career is not as simple as it looks (what is?) but there are many guides available online offering help if you are determined to make a go of it.

Buy-to-let mortgages are different to standard residential mortgages in a number of ways and it’s important to understand those differences before you begin. Firstly, they are normally offered on an interest-only basis, meaning that you will not be paying off your ‘capital debt’ only the interest on it. Secondly, you will need to find a larger initial deposit – up to 25% of the total purchase price. Thirdly, you are almost certain to face larger fees, higher rates of interest and larger Stamp Duty charges than you would on your home.

These higher interest rates and larger fees because they’re a greater risk for the lender. Landlords with a buy-to-let mortgage usually expect their monthly mortgage payments to be covered by the rent they receive.

Where SME funding Can Help

Choosing the right mortgage when investing in Buy-To-Let properties is essential. SME funding UK are here to help if you are unsure of the difference between this type of mortgage and the more common ‘residential’ variety, and to find the lender that is most suitable for you and your project.

We have access to the whole market and are experienced in finding the most suitable product for less conventional situations. We are are an independent brokerage with in excess of 30 years business finance experience and are perfectly placed to advise you and find a Buy-to-Let mortgage that matches your needs. With the recent changes to ‘Buy-to-Let’ and ‘Let-to-Buy’ it’s crucially important to get the right advice before you commit.

Buy-to-Let Mortgages – the Criteria

Lenders typically assess an applicant on the following criteria:

  • Age – Minimum age is usually 21 or 25, (very occasionally 18), Most lenders will lend up to age 75 but some up to age 85. Some have no maximum age at all under the right circumstances.
  • Borrower status – You can be a first-time buyer, first time landlord, experienced landlord or professional landlord – it varies by lender.
  • Location of residence – Most lenders require borrowers to be UK resident. Some will accept non-resident and expat applicants although they may need a larger deposit or charge higher rates.
  • Credit history – A poor credit history can make it more difficult to obtain a buy-to-let mortgage.

If you’d like any further information please don’t hesitate in getting in touch.

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SME funding UK Ltd is Authorised and Regulated by the Financial Conduct Authority – FRN: 772970

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Please note SME funding UK Ltd are brokers and not a direct lender.