Buy to Let mortgages tend to be similar to residential mortgages, although there are some key differences that you need to be aware of. Deposit, fees and interest rates are usually higher than a residential mortgage, so we can do the research for you on how much deposit you might need for a mortgage lender. As with a residential mortgage the more deposit you put down, the better the rate will be on your mortgage. If you have a minimum of 25% deposit for a Buy to Let investment you should be at a good starting place.

Lenders may request as much as 40% of the property value as a deposit.

Why is this?

Buy to Let property is seen as a higher risk to lenders, while the landlord will expect the rental income to cover the mortgage payments there are other fees to consider; for example, the cost of maintenance, or the cost of redecoration between tenants. What if the tenant's rent does not cover the mortgage payments and you need to top it up as a landlord (this is known as top-slicing), or what happens if the property is without a tenant for a long period of time?

What else do I need to prepare for?

Stamp Duty (SDLT)

As this will not be your main residence there will be additional stamp duty (SDLT) to pay at a higher rate than that of your residential.

Do your homework

Where are rental properties in demand? Do you foresee it being simple to get tenants in? Remember you don't have to own a home in your residential town.

It's an investment

In most cases you will be buying a buy to let property to generate an income, it is therefore not so important that all of your personal preferences are matched up.


Your mortgage affordability will be based on rental income rather than your household income.

  Can you be a First Time Buyer and First Time Landlord?  

The quick answer is yes; however some lenders do not prefer this option as it can be riskier. Other options could involve buying a property jointly with a parent for example.

You'll also need to prepare for the fact that you'll need landlords insurance rather than standard buildings and contents insurance. Landlords insurance covers malicious damage as well as the normal pitfalls you'd find on a house insurance policy.

  What are your motivations for a Buy to Let property?  

The following options are worth considering:

You'll get a regular monthly income from a Buy to Let property.
Different areas have different rental yields, such as near universities.

How long has the property you're looking at been on the market, why hasn't it sold yet?
Would you like a standard rental, or a holiday home or Air BNB?