Buy-to-Let Mortgages UK | Landlord Broker Advice

BTL Options

Types of Buy-to-Let Mortgage

Buy-to-let is not a one-size-fits-all market. The right product depends on your property type, ownership structure, and portfolio size.

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Standard Buy-to-Let

Single residential property let to a single household. Most widely available BTL product. Typically requires a 20–25% deposit and rental income of 125–145% of mortgage payment.

From 20% deposit

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HMO Mortgage

Houses in Multiple Occupation (3+ unrelated tenants) typically require a specialist HMO mortgage. Higher yields but more complex licensing requirements.

From 25% deposit

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Limited Company BTL

Buying through a Special Purpose Vehicle (SPV) limited company can offer tax advantages for higher-rate taxpayers. Fewer lenders, but rates are increasingly competitive.

SPV structures available

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Portfolio Landlord

Landlords with 4+ mortgaged properties face stricter underwriting since PRA rules changed in 2017. Portfolio specialist brokers assess your entire portfolio — not just the property being mortgaged.

4+ property portfolios

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Holiday Let Mortgage

For short-term lets via Airbnb and similar platforms. Assessed on projected rental income rather than AST yields. Not all lenders accept holiday let applications.

Specialist lenders available

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Let-to-Buy

Moving home but keeping your current property as a rental? A let-to-buy strategy uses your existing property's equity to fund your next purchase — requires careful planning.

Equity release route

Buy-to-Let Mortgage Costs & Rental Coverage

Property Value	25% Deposit	Loan Amount	Min. Monthly Rent (125%)	Min. Monthly Rent (145%)
£150,000	£37,500	£112,500	£530	£615
£200,000	£50,000	£150,000	£706	£819
£300,000	£75,000	£225,000	£1,059	£1,228
£400,000	£100,000	£300,000	£1,413	£1,638
£500,000	£125,000	£375,000	£1,766	£2,047

Minimum rent calculated at 5.5% stress test rate. 125% coverage applies to basic-rate taxpayers; 145% to higher-rate taxpayers and limited companies. Actual requirements vary by lender.

How BTL Mortgages Differ from Residential

	Buy-to-Let	Residential
Minimum deposit	20–25%	5%
Assessed on	Rental income	Personal income
Interest-only available	Yes — widely	Very limited
Stamp duty surcharge	+3% on full value	Standard rates
Mortgage interest relief	20% tax credit only	N/A
Limited company option	Yes	No

Key BTL Tax Considerations

📌 Stamp Duty surcharge: An additional 3% SDLT applies to all BTL purchases (on top of standard residential rates).
📌 Mortgage interest relief: Since April 2020, individual landlords can only claim a 20% tax credit on mortgage interest — not deduct it from profits. Limited companies still deduct it fully.
📌 Capital Gains Tax: When you sell a BTL property, CGT applies to the gain at 18% (basic rate) or 24% (higher rate) from April 2024.
📌 Section 24 impact: Higher-rate taxpayers may pay significantly more tax as individual landlords — a broker can model whether a limited company structure makes sense for you.

💡 Tip: Always take independent tax advice before choosing between personal and limited company ownership. A broker can recommend specialist BTL accountants.

Buy-to-Let Mortgage FAQs

Most BTL lenders require a minimum 20–25% deposit. Some specialist lenders accept 15% for standard properties in strong rental markets, but rates are higher. HMO and multi-unit properties generally require 25–30%. A larger deposit (35–40%) unlocks the most competitive rates.

It is possible but more limited — many BTL lenders require you to already own a residential property. Some specialist lenders do offer BTL mortgages to first-time buyers, usually with a larger deposit requirement and higher rates. A broker will identify which lenders accept your profile.

For higher-rate taxpayers, a limited company (SPV) often produces better after-tax returns because mortgage interest remains fully deductible at corporate level. However, there are setup costs, accountancy fees, and more complex mortgage markets to navigate. A broker and specialist BTL accountant can model the long-term figures for your specific situation.

Lenders assess rental income against the mortgage payment at a notional stress rate (typically 5.5%) rather than the actual rate. Basic-rate taxpayers need rental income to cover 125% of the stressed payment; higher-rate taxpayers and limited companies typically need 145%. This means the achievable rental income determines the maximum loan rather than personal income.

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