Buy-to-Let Mortgage Guide

Important Legal Note

Buy-to-let mortgages are not regulated by the FCA unless the property is or will be occupied by you or a close family member. Always use a qualified mortgage broker who specialises in buy-to-let.

Document Overview

Buy-to-let mortgages are assessed differently from residential mortgages. Understanding how lenders think helps you choose the right product and structure your portfolio efficiently.

How BTL Mortgages Differ:

Assessed primarily on rental income, not personal income
Minimum deposit: typically 25% (some lenders accept 20%)
Interest-only is widely available and commonly used
Higher rates than residential mortgages
Not regulated by the FCA (unless you or a family member will occupy)

Affordability and Stress-Testing:

Rental income must typically cover 125–145% of the monthly mortgage payment
Stress-tested at a notional rate (typically 5.5–6%) regardless of the actual rate
Higher-rate taxpayers face a stricter stress test (145% coverage at 5.5%)
Some lenders use top-slicing: personal income used to bridge any shortfall

Product Types:

Fixed rate: certainty of payment; typically 2 or 5 years
Tracker: follows Bank of England base rate; lower initial rate but variable
Discount variable: discounted from lender's SVR; risk of SVR increases
Interest-only: lower monthly payments; capital not repaid (repayment vehicle needed)

Portfolio Landlord Rules:

4 or more mortgaged buy-to-let properties: classified as a portfolio landlord
Lenders must assess the entire portfolio, not just the new property
Provide a portfolio schedule: address, value, mortgage balance, rental income for each property
Some lenders do not accept portfolio landlords — check before applying