Buy-To-let Mortgage: The Ultimate Guide

Applying for a buy-to-let mortgage can seem tricky. The options are vast. The terminology is unfamiliar, and the process of securing one may seem confusing. But don’t worry – we’re here to help! This blog post will take you through everything you need to know about buying a new property. The property with a loan secured against it for use as an investment. It will also include the basic information that you need to know before buying a to-let mortgage. Also, little details you need to consider before making the big decision!

We’ll start by looking at some common questions people ask when deciding whether to buy a to-let mortgage. Let’s start with the basics first.

What is a Buy-To-let Mortgage?

Piggybank and new house, saving for home, mortgage. Golden piggy bank. 3D illustration

A buy-to-let mortgage is a type of loan that enables individuals to buy property to rent it out. It differs from a residential mortgage as it’s not your primary residence. You can multiply properties with this type of finance and rent them all out at once. Despite the UK government’s best efforts to slow down buy-to-let landlords. It is still an attractive investment opportunity. Especially for those who can purchase a second home or build a property portfolio. If you have cash upright, it’s better to spend wisely. With to-let mortgages, you can earn a passive income. Less hassle and more money! What’s not to like?

How to apply for a Buy-To-Let mortgage and Who Can Apply?

Well, the first thing you need to do is to see if you qualify to buy a to-let mortgage.

Already Own a Property

The process will be a lot easier for you if you already own a property. If not, it can get difficult for you. But don’t worry it’s not impossible.

Enough Savings

You’ve been smart with your money, and have ample savings. That’s a good credit score to be proud of!

Your Earning Counts

You might already be a homeowner, but if you’re earning £25,000 or more and still renting out your home then there’s some good news for you.

Age is Just a Number But…

It is not easy to finance a mortgage for older individuals. Lenders typically have upper age limits that they will give mortgages to, which may be around 70-75 years old. And if you are 55 then it might take some time before someone agrees with your situation.

After you ensure that you qualify for buying a buy-to-let mortgage. The next thing you do is buy a property. That’s the way it works! You’ll need capital to be eligible for this type of mortgage.

Your lender will usually want to see that you have at least 20% or more equity on your home. Depending on what they are willing to lend you. And their requirements when it comes to affordability ratio. A lender will also consider your yearly salary should be more than 25,000 pounds per year.

People often buy properties through buy-to-let mortgages. Because they may be cheaper per month than residential ones.

The minimum deposit is often 25% of the property’s value. This can vary between 20-40%, although most buy-to-let mortgages are interest-only. Meaning you pay monthly on just your interest. Not on any principal amount owed until at the end when all debt that has accumulated over time must be repaid in full.

The housing market skyrocketed recently. Making it very expensive for individuals to purchase their homes. Because they could no longer afford them through traditional means. Like saving up money or waiting for a deposit.

Where to Buy a Buy-To-let Property?

buy-to-let mortgage concept. House and stack of coins. Saving money for buy a house for family. 3d illustration

In order to make the best investment. One must not only look for neighborhoods that are attractive and in demand. But also where it is easy enough to find tenants. Consider looking outside of your current city as there may be an opportunity you might have missed otherwise!

Consider expanding your search radius when searching for property investments. Let’s face it – not everyone is cut out to be a landlord. If you’re faced with the decision of whether or not to buy an investment property without using professional help. There are some important factors that need consideration before making your choice e.g. availability for tenants. Ultimately, this comes down to what kind of tenant you want and where they might live too.

Do bear in mind if you have decided against hiring an estate agent. When purchasing rental properties as such agents will take care of any complicated issues that arise which may occur during tenancy agreements between renters and landlords alike. So if accessibility needs are paramount then choose somewhere close by – like right next door!

The Benefits of Having a Buy-To-let Mortgage

Macro shot of buy-to-let mortgage concept

Buying a to-let mortgage is a good option for those who want the flexibility of renting out properties. And buying a to-let is also an excellent investment when rented at market rates. In addition, to let mortgage offers more options than traditional residential mortgage loans. Such as you can use a to-let mortgage as short-term investments or long-term ones.

The buy to let mortgages offer flexibility regarding how you use your property. Because they’re not constrained by specific regulations like conventional home loans. These loans only allow homeownership.

BTL landlords have greater control over their monthly expenses. Because the main thing is the rent payments go straight to the landlord’s bank account. Without passing through any third parties.

When you’re looking for a place to call home. The rental market can be an exciting adventure. With demand at its highest and homeownership less accessible than ever before. Renting is an alternative for many people who cannot afford a house of their own.

The Risks of Having a Buy-To-let Mortgage

partial view of risk manager protecting house model from falling wooden blocks with hand. buy-to-let mortgage risks concept

Not many people talk about the risks involved when you are planning to buy a to-let mortgage. But it is essential that you consider all aspects before getting yourself into it. When you buy a To-let mortgage. Some risks might not exist in traditional mortgages. So it is important to know what these risks are before making any decisions about buying.

One risk associated with purchasing this property type is that if interest rates change and go up significantly. When you take out your mortgage contract, then your monthly payments will also increase. This means that people who buy-to-let properties need to make sure they stay on top of current trends. And forecasts for future changes in interest rates!

You can expect to face a rental void if you buy a property that is not currently rented. This can be very expensive to deal with and challenging, so it’s best to plan for this in advance. You need to have money set aside or plan to rent the place yourself if this happens!

Again, one of the most important things when buying a to-let mortgage is making sure there are no hidden surprises. Like time limits on how long your tenant has before buying out of their lease, tenant obligations and regulations about pets, noise levels etc.

These will all affect whether someone decides to purchase from you or not. So ensure these details are spelled out clearly ahead of time!

If you encounter a problematic tenant who is always late on the rent. And doesn’t care about any of the obligations. It is best to buy their share out so you can start fresh with someone who will take better care of your property. If you want to avoid problematic tenants then check out our guide to tenant referencing for buy-to-let landlords

The buy-to-let mortgage market has been a hot topic for years now. As more and more people realise that they don’t need both a home and an investment to be successful financially. It used to be difficult for people like this. Because there weren’t many lenders available, but now things have changed! There are plenty of buy-to-let mortgages offered at very competitive rates. Making them perfect if you want some money sitting around doing nothing. While creating a healthy profit from renting out properties!

In some cases, the property’s value can go down. Just within three months. But if you think about the bright side! It can also increase in value, which would still mean making a profit. However, this is not rare. And buy-to-let mortgages are not advised for people who want to retire on the property they buy. As there is always an element of risk that comes with them.

Things You Need to Know Before Applying for Your First Ever Buy-To-let Mortgage

wooden house in a shopping cart with a red arrow next to it - buy-to-let mortgage concept

Yes, buy-to-let mortgages are a fantastic way to make some extra money. But as there’s always an element of risk involved. You must understand, it is the most significant commitment you are going to make. So, you must be aware of what you’re getting yourself into before taking the first step. Applying for one, so your application gets accepted. However, a rejected application can damage your reputation.

With the market on the property being as competitive and challenging to get a hold of. It is much easier for you to have your paperwork in order. If we are talking about understanding what’s important when applying for a first-time mortgage. Our credit scores should be high up on that list. A lender will use this information to assess how risky they think their investment would be by lending money. Without an impressive score or cash down payment. There isn’t any way around paying more interest than necessary every month. Because banks don’t like risk-taking with loans anymore these days.

The lender will consider your ability to repay a loan when deciding whether they want to accept an application. Interest rates are one of the most critical factors. They help in determining how much you’ll pay back every month. So it shouldn’t be shocking that this is what many people focus on before buying a house.

And finally, you need to assess the lender. Because you cannot afford to have a rejected application when you buy a property. You need to make sure that the lender qualifies to serve you by checking them out.

Tips on How to Use Your Newfound Responsibility and Successfully

House key on a red color house shaped keychain resting on wooden floorboards concept for buy-to-let mortgages, moving home or renting property

The buy-to-let mortgage market can be complex and confusing. There are many types of buy-to-let mortgages. With various offers from a range of providers. You need to consider the aspects carefully.

Consider the Type of Property

Before you buy a property consider if it suits your needs as a landlord. Plus the type of tenant who might live in the accommodation.

Set a Meeting with the Buy-To-let Mortgage Advisor

The buy to let mortgage adviser will set up an appointment for you at their office. There they can discuss all aspects related to buying to-let mortgages in greater detail. Including what’s available now, how much each deal costs, repayment plans, and more.

This way, you’ll gain clarity around which option fits best with your situation. Or budget without having too much upfront investment.


The buy-to-let mortgage is a great way to invest your money and make some extra cash on the side. However, it does come with risks that you need to be aware of before getting one. We hope this article has helped you better understand the benefits and potential pitfalls of having a buy-to-let mortgage as an owner landlord. So you can decide if this investment opportunity is right for you! If you feel you need further assistance related to your property management needs, contact us at Oasis Living.

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