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Buy-to-let mortgages

Find the right buy-to-let mortgage for your property

  • If you’re purchasing a property and plan to rent it out, a buy-to-let mortgage could be the perfect solution for your needs. Read MoneySuperMarket’s handy guide to learn all you need to know.

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Choosing a buy-to-let mortgage

A buy-to-let mortgage is a mortgage sold specifically for those who buy property as an investment, rather than getting a mortgage for somewhere they want to live themselves. 

Buy-to-let mortgages work differently to standard residential mortgages. So, if you’re choosing to rent out your property, lenders will prefer you to finance your purchase with a buy-to-let mortgage. 

When you compare buy-to-let mortgages with MoneySuperMarket, we do the hard work for you. We’ll compare mortgage deals and lenders from across the market, so you can find the best buy-to-let mortgage that suits your needs.


How do buy-to-let mortgages work?

Buy-to-let mortgages are a way for existing investors and new landlords to take their first steps into the rental property market. Here’s how a buy-to-let mortgage works:

  • Put down your deposit

    The minimum deposit for a buy-to-let mortgage is typically higher than a standard, residential mortgage. This is usually at least 25% of the property’s value (but can vary between 20–40%).

  • Interest-only payments

    Most borrowers take out an interest-only mortgage for their chosen property. This way, you’ll pay the interest each month but not the full capital amount.

  • Pay back the full amount

    At the end of the mortgage term, you’ll repay the capital debt, which is the full amount of the mortgage. Often, borrowers might save into an ISA to repay the capital, or sell the investment property to pay off the debt.

How much will my buy-to-let mortgage cost?

How much your buy-to-let mortgage will cost you will depend on several factors. The main ones are:

  • Size of your deposit: The bigger deposit you can put down, the smaller the mortgage you'll need to borrow. Lenders will usually ask for 25% of the property’s value, although it can be higher

  • Interest rate: You’ll only pay back the interest each month, not the full capital amount

  • Loan term: You’ll pay back the full cost of the mortgage at the end of the loan term

With a buy-to-let mortgage, you’ll only usually pay the interest each month, not the full capital amount. But while this might mean your monthly repayments are cheaper than a standard residential mortgage, you’ll need to consider how you’ll repay the full cost of your mortgage debt at the end of the loan term.

To get an idea of your buy-to-let mortgage eligibility and affordability, our mortgage repayment calculator can be a good place to start. You can work out what your repayments will cost you each month. This will be based on how much you’re borrowing, the interest rate and fees of your mortgage deal, and how long you’ll have to pay it off (the term).

What are the interest rates on buy-to-let mortgages?

Interest rates on a buy-to-let mortgage can be influenced by various factors. These include:

  • Loan-to-value (LTV) ratio

    The bigger proportion of the property you have to pay for through the mortgage (LTV), the riskier the loan. This can result in higher interest rates

  • Credit history

    Lenders assess your creditworthiness and affordability to determine the risk involved. A poor credit history may lead to higher interest rates

  • Changing base rate

    Interest rates can be affected by changes in the base rate set by the Bank of England. A rise in the base rate generally leads to higher mortgage rates, while a decrease can result in lower rates

  • Fixed or variable rate mortgage

    If you have a fixed-rate mortgage, your interest rate remains constant throughout the agreed period. In contrast, a variable rate or tracker mortgage can be impacted by changes in the base rate, causing fluctuations in interest rates

Who is eligible for a buy-to-let mortgage?

While lenders may vary in their eligibility criteria for a buy-to-let mortgage, most will require the following:

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    Your age

    Most lenders will require you to be 21 or over to apply for a buy-to-let mortgage. Bear in mind that you’ll usually need a good credit score

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    Your income

    Some lenders will require a minimum income for a buy-to-let mortgage. Usually, the minimum you need to be earning is around £25,000, especially if you’re a first-time landlord

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    For a buy-to-let mortgage, most lenders will ask for a 25% deposit. But this can vary, as some lenders may ask for a higher amount (sometimes even up to 40%)

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    Borrowing history

    Lenders will look at your credit history to check you’re a reliable borrower. If you have a history of poor credit, you may want to improve your score first

How big a deposit do I need for a buy-to-let mortgage?

The size of the deposit required for a buy-to-let mortgage in the UK typically ranges from 25% to 40% of the property's value. Factors that can affect the required deposit include your income, creditworthiness, and the lender's criteria.  

Buy-to-let mortgage deposits are typically higher than residential mortgage deposits due to the increased risks associated with renting out the property and the complexity involved if the property needs to be repossessed with tenants in place.

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How can I get the best deals on a buy-to-let mortgage?

  • Compare from a wider range of deals to find the cheapest rate

    Shopping around can help you find the cheapest interest rate. With MoneySuperMarket, we compare deals from across the market to find the right one for you

  • Keep an eye on your credit score

    Before you apply, check your credit report. Your credit rating can have a big impact on what mortgage rate and deal you’ll be offered. Take steps to improve your score

  • Consider what type of mortgage is right for you

    A fixed-rate deal can offer you peace of mind, as you’ll know what your monthly repayments will be. But a tracker or variable-rate mortgage could work out cheaper overall

  • Be mindful of fees

    Note any fees attached to the mortgage as these can affect the overall cost. Is there an early repayment charge if you want to leave the deal before the end of your mortgage term?

What to consider before choosing a buy-to-let mortgage?

Before you go ahead with a buy-to-let mortgage, there are a few things to consider that may affect your finances. These can include:

  • Tax implications: There are tax implications for buy-to-let investors, both on rental income and when you sell. Depending on how much income you earn through rent, you’ll pay differing rates of income tax. Similarly, when you sell a buy-to-let property, you may have to pay capital gains tax (CGT) on some of the profits.  

  • Rental income: Your property may not always have tenants, so there may be times when the property is unoccupied and rent isn’t paid. You’ll need a financial backup for any such ‘void periods’, so you can continue to repay your mortgage 

  • Loan term: Work out how long you need the initial mortgage agreement to last and what action you’ll take when it ends. If your financial situation changes if might be easy to remortgage and you may have to sell the property


What are the benefits of buy-to-let?

Many investors, including those from overseas, look for buy-to-let properties in the UK. Here are some of the reasons why

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    Rental income

    Generates a steady stream of revenue from tenants, providing a source of passive income – although the property needs to be properly managed

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    Capital appreciation

    Property values have increased over time in the UK. While there is no guarantee this will continue, there could be potential for long-term capital gains

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    Portfolio diversification

    Owning a buy-to-let property can add diversity to your investment portfolio, spreading risk across different asset classes

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    Keeps pace with inflation

    Property values and rental income can potentially keep pace with inflation, protecting your investment against eroding purchasing power

Ashton Berkhauer

Our expert says


Buy-to-let property might appear to be an attractive way of investing, but you should consider all factors before taking out a mortgage. This includes stress-testing your finances. For example, what happens if interest rates rise? Or the property is vacant for a given period? Or you face a large bill for the building’s upkeep? Also, consider any tax implications before making a final decision.

- Ashton Berkhauer, Home services and broadband expert

Why compare buy-to-let mortgages with MoneySuperMarket

Find the best deal on buy-to-let properties with MoneySuperMarket:

  • It doesn’t take long

    You provide us with a few details about you, your financial circumstances, and the property you want

  • We search for mortgages

    We do the hard work of finding the best mortgage deals and lenders to meet your specific needs

  • Continue to broker

    Once you’ve found the right provider, you can click through and make your full application

A buy-to-let mortgage in the UK is a loan specifically designed for purchasing a property with the intention of renting it out. Unlike residential mortgages, buy-to-let mortgages consider the potential rental income as a key factor in determining eligibility and loan terms.

Comparing the best buy-to-let mortgage rates using a comparison website, such as MoneySuperMarket, can be a great way to find the right deal for you.   

  1. Use a reputable comparison website that specialises in mortgages and has a wide range of lenders listed 

  2. Enter your desired loan amount, property value, and loan term to get accurate results 

  3. Refine your search by selecting the specific type of buy-to-let mortgage you're interested in, such as fixed or variable rate 

  4. Compare interest rates, fees, and any additional features or incentives offered by different lenders 

  5. Consider the overall cost, including arrangement fees, valuation fees, and early repayment charges 

  6. Read user reviews and ratings to gauge customer satisfaction and service quality 

Remember, it's important to carefully review the terms and conditions before making a final decision and consult with a mortgage adviser if necessary.

Unlike most residential mortgages, buy-to-let mortgages are commonly offered on an interest-only basis. This means that your monthly mortgage payments will only cover the interest on your mortgage. Your capital debt, which is the money you’ve borrowed, will not go down unless you choose to make extra payments or take out a repayment mortgage.

You will need to pay the capital debt off in full at the end of your term. You could do this by selling the property. Alternatively, you could keep the property and take out another mortgage.

A buy-to-let mortgage normally requires a larger deposit than a residential mortgage. You may face larger upfront fees and pay a higher rate of interest. You will have to pay more stamp duty for a second property that is not your main home. Some buy-to-let investors choose to set themselves up as limited companies for taxation purposes. 

Yes, mortgage interest rates for buy-to-let properties in the UK are generally higher than residential mortgages. This is because lenders perceive buy-to-let investments as riskier, due to factors such as potential rental income fluctuations, the possibility of property vacancies, and the landlord's reliance on tenants for timely rental payments. The higher interest rates help compensate for these additional risks associated with buy-to-let investments.

If you are planning on buying a property to let out, there will be other fees that you may need to factor into your budgeting when deciding whether you can afford a mortgage.

These include the following:

  • Stamp duty, surveyors’ fees, and other charges when buying

  • Tax on rental income

  • Building and landlords’ insurance

  • Rent insurance (optional)

  • Letting agents’ fees (if you choose to use them)

  • Maintenance and repairs for the property or possibly ground rent

It’s worth investigating landlord regulations and responsibilities to find out more about the costs involved in buying a property to let.

Generally, first-time buyers will find it very difficult to take out a buy-to-let mortgage. This is because most mortgage providers require you to own at least one home already. That said, some lenders might consider first-time buyers too.

In this circumstance, you may want to ask for the help of a professional mortgage adviser. They’ll be able to direct you with confidence and present you with the best options based on your needs, situation, and pockets.

Don’t forget that MoneySuperMarket is here to help as well!

Because you only pay interest on a buy-to-let deal, you’ll need to repay the full value of your mortgage at the end of your term. You may be able to extend your mortgage or decide to sell the property.

If you choose to sell, you’ll be able to make a further profit if house prices have risen since you took out your mortgage. However, if house prices fall, you’ll still need to pay off the rest of the mortgage yourself.

How many buy-to-let mortgages you can have will depend on your mortgage provider and how much they’re willing to lend to you.

Some providers may only allow you to take out one or two buy-to-let mortgages. Others may allow you to take out as many mortgages as you want to, as long as you have the deposits and the rental income to cover the costs.

If you have four or more buy-to-let mortgages, you’ll be classed as a portfolio landlord.

There is no universal answer to this question, as every application is different. There are many factors why your buy-to-let mortgage application might be rejected. 

One of the reasons could be that you’ve reached your borrowing limit and lenders don’t deem it affordable for you to borrow more. If you’re taking out more than one mortgage at a time, your lender may also have a limit on how many deals they can offer you at once. 

Ultimately, lenders are unlikely to allow you to borrow what they deem as ‘too much’, as they may be concerned that you will struggle to repay your debt.  

What’s more, lenders may want to make sure that your rental income will be about 20%–30% more than your mortgage. If your projected rental earnings are lower than that, then lenders may reject your application. 

Another reason for which your buy-to-let application might be declined is if you already own several properties for rent. Specifically, this could be seen as an issue if your existing mortgages have high loan-to-value (LTV) ratios. This is because you already owe lenders a significant amount of money.

No, you can’t. Most buy-to-let mortgages will make clear that the owner is not allowed to live in their buy-to-let property under any circumstances.

This is because buy-to-let mortgages aren’t regulated by the Financial Conduct Authority (FCA). This means that lenders could face fines and punishments if they set up an unregulated mortgage for one of their borrowers’ properties.

If you’re found to be living in your buy-to-let home, even if it’s only for one or two days, you may be breaking the terms and conditions of your contract. In this scenario, you may be asked to immediately repay your loan in full.

If you currently have a residential mortgage but want to change to a buy-to-let mortgage, you’ll need your lender’s approval.

Before you rush into a decision, you’ll need to weigh up if a buy-to-let mortgage is the right option for you, as they differ from residential mortgages. You may also want to consider switching lenders as, by sticking with your current provider, you’ll only be shown their own current mortgage rates.

Comparing mortgages with MoneySuperMarket will show you deals from across the market, helping you find the best buy-to-let mortgage rate for your needs.

Remortgaging your buy-to-let property can help you save money on monthly payments and free up equity, as well as get a better interest rate. Bear in mind that remortgaging can affect your monthly repayments and return on investment.

The best buy-to-let remortgage deal for you depends on several factors, including your credit score, income, the size of your deposit, the type of property you have, who you rent to, and how much equity you have in your rental property.

By comparing deals with MoneySuperMarket, you’ll be able to shop around for the best buy-to-let remortgage rate.

Other mortgage types to consider

Other mortgage types you might want to consider if you’re looking to remortgage include:

  • Capped-rate mortgage – a capped-rate mortgage is a variable-rate mortgage, but there is a limit to how high the rate can go. This can be useful if you want a variable-rate mortgage, while avoiding unaffordable payments if the rate rises

  • Discounted mortgage – a discounted mortgage is another type of variable-rate mortgage. This offers a discounted rate on the lender’s standard variable rate for a certain period of time

  • Offset mortgage – an offset mortgage helps to reduce the overall interest you pay by offsetting your savings against the outstanding balance of your mortgage. But this means you won’t be gaining any interest on your savings during the deal

Fixed-rate mortgages have an interest rate that stays the same for a set period. This could be anything from two to ten years. Your mortgage payments are the same every month and you don't need to worry about fluctuations in interest rates.

If you choose to leave the deal before the end of the fixed term, most will charge you a penalty. This is known as an early repayment charge (ERC).

Interest rates adjust periodically with a variable-rate mortgage, which means repayments may change throughout the loan term. Usually, the interest rate changes in relation to the Bank of England base rate. This is very influential on variable interest rates, as is the base rate of each lender.

For standard variable-rate (SVR) mortgages, each lender has a SVR that they can move when they like. In reality, this tends to roughly follow the Bank of England's base rate movements. SVRs can be anything from two to five percentage points above the base rate (or higher). They can also vary massively between lenders.

The other type of variable mortgage is a discount mortgage. Rather than being linked to the Bank of England base rate (like a tracker mortgage), discounts are linked to the lender's standard variable rate (SVR). For example, if the SVR is 4.50% with a discount of 1%, the payable mortgage rate is 3.50%. If the SVR rose to 5.50%, the pay rate would rise to 4.50%.

The problem with discounts is that SVR changes are at the lender's discretion. So, your mortgage payments could change even if there has been no alteration in the Bank of England base rate. What's more, even if the SVR changes following a move in the base rate, there is no guarantee that it will increase or decrease by the same amount.

As a result, trackers are usually seen as more transparent than discounted deals. They are also often seen as being fairer for the borrower.

For example, when the base rate fell from 5.00% to 0.50% between October 2008 and March 2009, Lloyds TSB was the only top-20 lender to reduce its SVR by the full 4.50%. All the others cut their rates by less.

When the Bank of England raised the base rate from 0.25% to 0.5% in November 2017, anyone who wasn’t on a fixed-rate mortgage was at risk of seeing their repayments increase. A number of leading mortgage lenders followed and increased their tracker and/or SVR rates a month later.

Most mortgage deals carry arrangement fees, which can vary from a few hundred pounds up to a couple of thousand.

Also, bear in mind that these set-up costs can sometimes be made up of two fees. An increasing number of lenders charge a non-refundable booking fee, which is effectively a product reservation fee. If your house purchase falls through and you don’t end up taking the mortgage deal, you won’t get this fee back.

The second type of fee is an arrangement fee, which you pay on completion of the mortgage. Therefore, you won't have to pay it if, for any reason, you don't take the mortgage.

Calculate how early you could pay off your mortgage. But make sure you read our mortgage overpayment guide first, as overpaying isn’t the right move for all homeowners.

Mortgage overpayment calculator

Remember to always factor these into the overall cost of any deal. Even if a lender is offering a seemingly unbeatable rate, steep fees could mean that it’s actually more cost-effective to opt for a higher rate. In fact, this may come with a much lower fee, or no fee at all.

The best mortgage rate for you depends on how much you are looking to borrow. If you’re applying for a large mortgage, a high fee is often worth paying in order to secure a low interest rate. But those with smaller mortgages could be better off opting for a higher rate and lower fee.

However, while this is the general rule, it's well worth crunching the numbers when you’re comparing mortgages. You need to work out the total cost over the term of the deal. For example, if you are going for a two-year fix, you need to work out the cost of your repayments over the term. You can do this by finding out what the monthly payment will be using our mortgage calculator, then multiplying by 24. You then need to add on the arrangement fee to find out the total cost.

You'll likely find that you have more mortgage deals available to choose from if you have a good credit history. So, it’s worth making sure that your credit report is as good as it can be before applying for a mortgage.

Steps like paying off any outstanding borrowed credit you owe, as well as ensuring your current address is on the electoral roll, can help to improve your credit score.

The more money you can save as a deposit, the less you’ll need to borrow as a mortgage loan. What’s more, having a bigger deposit can help you get access to more competitive mortgage rates.

Lenders will often have a maximum ratio they’re prepared to offer you. Instead, the rest will need to be made up with either a deposit or an equity loan like the government's Help to Buy equity loan scheme.

Using a mortgage comparison tool can help to give you a better idea of how much you’d need to pay in monthly costs and interest. It provides information on the duration of the deal and the maximum loan-to-value ratio. It also tells you about product fees you may need to pay for the mortgage deals available based on your borrowing requirements.

It’s important to remember, though, that the actual mortgage deals you’re offered when you go to make an application may differ. This is because they will then be influenced by your financial situation and credit history.

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