Best Buy to Let Mortgage Rates Compare Deals

Use our free and easy best buys comparison tool below to compare the best buy to let mortgage rates and remortgage buy to let deals from across the market.

The Financial Conduct Authority does not regulate some forms of BTL mortgages, such as where the property is purchased for investment and rented out. Some BTL mortgages such as consumer BTL mortgages come under FCA regulation.

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These are indicative figures only and may not represent all the costs associated with each product. For more information speak to one of our buy to let mortgage advisors on 0330 433 2927.

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What Is a Buy to Let Mortgage?

A buy to let or buy to rent mortgage is a type of mortgage specifically for properties that are owned or purchased with the intention of renting them out.

They're often set up on an interest only mortgage basis, which means you only make monthly interest payments each month. The outstanding loan balance - i.e. the amount you borrow - doesn't reduce and is paid back at the end of the mortgage term via a suitable repayment vehicle, usually the sale of the property.

If you rent out a property on which you only have a residential mortgage, you’ll be in breach of your mortgage agreement which could put your property at risk of repossession. To rent out your property without breaching your mortgage agreement you'd have to either obtain consent to let from your existing lender or switch to a buy to let mortgage. Find out more about converting your residential mortgage to buy to let.

You can find out more in our Complete Buy to Let Guide. 

Why Is Finding the Best Buy to Let Rate Essential?

Buy to let mortgages are designed for people who want to buy a property and rent it out rather than live in it themselves. It’s an investment. Therefore finding the right buy to let deal is critical if you want to make the most of your financial venture - otherwise, what’s the point?

As an independent mortgage broker with over 50 years of experience, we're perfectly placed to advise you and find the best buy to let mortgage that matches your property needs. John Charcol has access to the whole market and we're experienced in finding the most suitable mortgage product for less conventional situations. Contact our experts today to get the best buy to let mortgage deal for you. 

John Charcol Expert Tip - October 2024

"BTL mortgages, including competitive BTL rates and options for BTL remortgages, are specifically designed for individuals looking to invest in property and generate rental income. Whether you're a first-time landlord or expanding your property portfolio, BTL mortgages offer flexible terms that align with your investment strategy. With the potential for long-term financial gains, investing in a BTL property can be a smart move. Navigating the various requirements and responsibilities of being a landlord may seem complex, but with expert guidance, you can secure the right BTL mortgage and maximize the return on your investment."

- Mortgage Technical Manager Nicholas Mendes, CeMAP qualified

WHAT ARE THE DIFFERENT TYPES OF BUY TO LET MORTGAGES?

Most buy-to-let mortgages are interest only. This means that you only pay the interest back each month and you settle the mortgage balance at the end of the mortgage term, usually by selling the property. There are several different rate options when it comes to interest only buy to let mortgages, including:

  • Standard variable rate (SVR) - each lender has its own standard variable interest rate. This rate often moves in line with the Bank of England’s Base Rate, but it doesn’t have to. The lender can decide when it goes up or down. The SVR is usually the highest interest rate and it can change without warning. You wouldn’t take out an SVR mortgage deal, but would be transferred onto your lender’s SVR when your introductory (fixed, discount or tracker) rate period ends. You would typically avoid going onto your lender’s more expensive SVR by remortgaging when your introductory rate is due to end
  • Fixed rate - this is usually an introductory deal in place for a set number of years at the start of your mortgage. The fixed interest rate will stay the same for that period, usually 2, 3 or 5 years. After this, you’ll be moved onto your lender’s SVR, which will usually be higher, unless you get a BTL remortgage
  • Discount rates - this is another introductory offer, where you will pay a set percentage less than your lender’s SVR. For example a 2% discount rate on a 5% SVR would mean that you pay 3% interest. This can go up and down in line with the SVR
  • Tracker - a tracker mortgage moves in direct relation to the Bank of England’s Base Rate, set above it by a certain percentage. For example, you might be paying 2% more than the Bank of England Base Rate. When the Base Rate goes up or down, so will your mortgage interest. Tracker rates are again available as introductory rates offered for a certain number of years, though some lenders may offer them for the duration of your mortgage

Limited Company Buy to Let Mortgages

Choosing the best buy to let mortgage rate for your situation isn't the only aspect of buy to let mortgages you need to consider. You can also look at whether you want a buy to let loan for private landlords - as is the focus of this page - or a buy to let mortgage via a limited company. Both serve the same purpose, but a limited company buy to let mortgage is in the name of a limited company - not your personal one - meaning it can offer certain tax benefits for some people.

Buy to Let Mortgage Criteria and Considerations

Rental Income

Your adviser will ask you for a rental income estimation when they first gather information about your circumstances and requirements for a buy to let mortgage. A rental income estimation is basically how much you think you’ll be able to charge in monthly rent on a property. You can ask estate agents for rental income estimates when you view properties. It’s also worth looking online at the rent for similar properties in the area you want to purchase. You need to provide your adviser with a rental income estimation as the lender will use your expected rental income to calculate what you can afford in monthly interest payments when they put together your DIP (Decision in Principle). 

They usually ask for rental income to be between 125% and 145% of the monthly interest payments and often conduct a “stress test” assuming an interest rate of around 7% to make sure you’ll be able to cover any fluctuations in interest rates or surprise expenses. Buy to let lenders will still look at your personal income to check you would be able to cover any future repairs or periods when the property is vacant.

Deposit

Rental property mortgages have higher interest rates and usually require bigger minimum deposits than residential mortgages - 25% compared to 5% or 10% - to compensate for the additional risk taken up by the lender.

Age

Minimum and maximum ages for buy-to-let lenders vary but a few will accept applications from people as young as 18 years old and some will go as high as 85 years old. There are even a handful that don’t have a maximum age limit.

Borrower Status

You can be a first time buyer, first time landlord, experienced landlord or professional landlord. Which lender you can use depends on individual lenders’ preferences, but typically first-time buyers will find fewer lenders willing to lend on buy-to-let properties. Not all lenders accept large portfolios either.

Location of Borrower's Residence

Buy to let mortgage lenders normally require that borrowers live in the UK. There are some lenders that accept expat applicants, but these underwriters may have slightly stricter overall criteria.

Credit History

A poor credit history can make it difficult to obtain a mortgage, especially one at a particularly competitive rate. There are some lenders that are more flexible than others but these often require that you use a buy to let broker like John Charcol.

Tax

Landlords are taxed differently from private residential property owners. You’ll pay additional Stamp Duty when you buy your property and Income Tax on rental income you receive from your tenants. It’s also worth nothing that you might have to pay Capital Gains Tax if you eventually sell the buy to let property.

Should You Use a Buy to Let Mortgage Broker?

Buy to let mortgages can be complicated and it’s the job of a mortgage broker like John Charcol to find you a suitable product.

Why Is It So Important to Use a Broker for a Buy to Let Mortgage?

  • It’s not always easy to find the right information about the potential property types or the buy to let mortgage affordability criteria you need to meet online. We know the requirements for each lender and will look at your entire situation and future needs, so we can advise you accordingly
  • Some lenders require that you use a mortgage broker and won’t accept applications directly from applicants, which means we can give you access to more lenders and better buy to let mortgage rates
  • Buy to lets can be particularly complex, especially if you’re a new landlord. As an experienced buy to let mortgage broker we make sure you understand how these mortgages work and exactly what you’re applying for
  • The adviser assigned to your case will do all the hard work for you, ensuring you get the best deal for your property

How Can John Charcol Help You Get a Buy-to-Let?

We Take Care of Everything

We manage all aspects of your application, including liaising with the lender throughout the entire process.

We're Highly Recommended

As an award-winning broker we have negotiated hundreds of successful buy-to-let mortgage applications.

We Give Personal, Expert Advice

Buying a property at auction? Got a complex income structure? Our advice is tailored to your situation.

Buy to Let Mortgage Deal Process

Below are the main steps you’ll take to find the best buy to let mortgage rate - from quote to completion.

1. Meeting with Adviser and Mortgage Research

When you call us, you can arrange a phone or video appointment with your BTL mortgage advisor or a face-to-face meeting – whatever suits you best. Your adviser will ask you a few questions and, once they have all the information they need, they’ll begin the process of finding you a BTL mortgage for your circumstances and future needs. They’ll also arrange a follow up call to present you with what they’ve found. It may require more than one conversation to gather all the right information, depending on where you are in your BTL property search.

2. Decision in Principle

Once you’re happy with their recommendation, they’ll go about securing your DIP (Decision in Principle) - which is basically a promise from the lender that they’ll loan you money on the condition that the information you’ve provided is correct and subject to a valuation of the property.

3. Offer on Property

After you’ve secured a DIP (Decision in Principle), you’ll be in an excellent position to make an offer on your investment property. Sellers like DIPs. They show you can afford the purchase and have passed the lender's credit check.

4. Pre-Application and Submission

Following the acceptance of your offer, we’ll send you some information which explains all the documents we need to submit to the lender. You’ll be assigned a client relationship manager who’ll check and submit certified copies of your documents; they’ll liaise with both you and the lender. Your BTL mortgage adviser will then submit the fully packaged mortgage application.

5. Lender Underwriting and Valuation

The lender will underwrite your application; this basically means they’ll verify the information you’ve provided and review all your documents for themselves. They’ll also instruct a valuation for their purposes on the property you want to buy to make sure there are no significant problems with it.

6. Mortgage Offer

If the lender is happy with everything they’ve found, they’ll send you a mortgage offer. They’ll also send us a copy.

7. Conveyancing

After you’ve accepted your buy to let mortgage offer, you’ll go through the legal part of the process, known as conveyancing. This is where the solicitors/conveyancers draw up contracts and organise the actual, legal purchase of the property. You’ll also need to arrange buildings insurance at this stage, making sure it’s in place from exchange.

8. Exchange and Completion

Once everything is in place, your conveyancer/solicitor will exchange contracts with the seller’s conveyancer/solicitor. It’s at this point that you put down your deposit and are legally bound to buy the property. You’ll lose your deposit if you pull out after exchange. The purchase completes when money is transferred on an agreed-upon date. As soon as you have a date for completion you’ll know when the property can take tenants, and can therefore start speaking to a letting agent.

What our customers say

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    I am very thankful for David Putneys’ professional, responsive and honest assistance in securing the mortgage loan for our home in the UK. David was organized and thorough, as well as kind which made all of the difference when we faced a number of challenges to reach our goals. His dedication and commitment to servicing his client's requirements were exceptional. I will continue to recommend David Putney at John Charcol to family and friends that require mortgage assistance.

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    Steve is always on the case and very pleasant to deal with. Highly recommended.

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    Samm was superb at helping rework our life and protection insurance products. Was very helpful and friendly, and also flexible on times to discuss our needs.

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    My particular situation was quite unusual and complex - being retired and having a foreign income. Not only did John Charcol find me a mortgage, but a health insurance policy to cover the term at a very competitive price. I couldn't be more please with the service they have provided.

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    I am very happy with the services provided by John Charcol. I was assigned Lisa who went above & beyond to help me through a stressful house move. Lisa was fast with her responses & even dealt with issues I was having that weren’t her responsibility which I appreciate so much. I can’t thank her enough for her kindness & efficiency through the whole process, along with Bilal who was equally just as helpful. Thank you so much!

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    Super efficient service and much patience when I was slow in responding. Provided quotes and services quickly and clearly.

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Buy to Let FAQs

Who Can Get a Buy to Let Mortgage?

When assessing whether you’re eligible for a buy to let mortgage deal, lenders assess your potential rental income and look at whether you meet certain criteria. The criteria and requirements you need to meet can vary from lender to lender. Because buy to let mortgages are typically seen as riskier for lenders than residential mortgages, they tend to have stricter requirements. To find out your options, call us on 0330 433 2927.

Are BTL Mortgage Interest Rates Different from Residential Rates?

Even the cheapest buy to let mortgage interest rates tend to be a little higher than the rates included in mortgage deals on residential properties as buy to lets are riskier investments for lenders.

For example, if you have a mortgage on your home and a mortgage on a rental property, but you find yourself able to make only one of these monthly payments, it’s very likely you’ll prioritise the mortgage payment on your home over the one on the rental property.

Therefore, to compensate for the additional risk, buy to let lenders set interest rates slightly higher. They also usually require a bigger minimum deposit – usually at least 25%.

You can look at BTL mortgage rates from across the market with our free BTL rate comparison tool above.

How Many Buy to Lets Can I Have?

Lenders have different rules regarding how many mortgages you can take out with them for buy to let properties. There are also some limits based upon your entire portfolio, including any properties mortgaged with other lenders. Many high street lenders cap the number of buy to let properties you can have while there are other lenders that work with portfolio landlords who own 4 + properties. Find out more about being a portfolio landlord.

How Much Can I Borrow for a Buy to Let?

The amount you can borrow and the rates available to you will depend on the size of your deposit and your expected rental income, as this will determine how much you’ll be able to afford in monthly interest payments. Use our buy to let mortgage calculator to estimate how much you could borrow.

Can You Change a Residential Mortgage to a Buy to Let?

You can apply for consent to let on your residential property from your current lender if you only intend on renting it out for a certain period of time - e.g. a year. Alternatively, if you want to let out your current home indefinitely and maybe release some equity from it at the same time to buy a new home, you’ll want to consult a mortgage broker about letting to buy.

Can a First Time Buyer Get a Buy to Let?

It is possible for a first time buyer to take out a mortgage on a buy to let property but there are very few lenders available that offer these kinds of niche products, so you may want to consult a mortgage broker on buy to let mortgages, such as John Charcol.

Can You Get Mortgage on a BTL Property with a Deposit of Less than 25%?

The majority of BTL lenders offer LTVs (loan-to-values) up to 75%. There are several specialist lenders which offer LTVs up to 80%. You may want to speak to a BTL mortgage adviser if you’re after one of these slightly more specialist mortgages as they tend to be relatively expensive.

Can You Apply for a Mortgage in a Limited Company Name?

You can apply for LTD company BTL mortgages in a limited company name but some lenders will require that the limited company has been set up as an SPV (special purpose vehicle). If you’re setting up a company to purchase an investment property, you should seek professional tax advice to help you decide if it’s the right course of action. Find out more in our LTD Company BTL Guide.

Why Might a Buy to Let Mortgage Application Be Declined?

Your buy to let mortgage application could be denied for a number of reasons, including:

Property type - not all lenders offer buy to let mortgages on all property types. For example, you could be declined a buy to let mortgage for high-rise flats, ex-council houses, or non-standard construction properties.

Buy to Let Guide

You can now get a buy-to-let mortgage at interest rates to suit almost any circumstances. Our guide takes you through the choices involved in more detail.

Buy-to-Let Tax Changes

Our buy-to-let tax changes guide takes you through the latest regarding the Stamp Duty holiday, buy-to-let mortgage interest tax relief and more.

Tax on Rental Income

What don’t you know about the tax on rental income? Our guide gives landlords insight on how it’s applied, the rates you’ll pay and your allowances.

Capital Gains Tax Guide

You pay Capital Gains Tax on the profit you make from the sale of a property that’s not your main residence. In our guide we answer all your questions about CGT.

Becoming a Landlord

You can make a lot of money from becoming a landlord – if you make smart choices. Our guide explains how it all works and contains tips to help you be successful.

Buy-to-Let Mortgage Calculator

Want to know how much you could potentially borrow on a buy-to-let mortgage? Find out with our free and easy calculator below.

Buy-to-Let Rent Calculator

Not sure how much you need in rental income? Use our free buy-to-let rent calculator to work out how much you need in rent to qualify for a buy-to-let mortgage.

Rental Yield Calculator

Here you can use our free and easy calculator to work out the rental yield on your buy-to-let property. You’ll also find information on what a rental yield is and why it’s important.

Buy-to-Let Stamp Duty Calculator

Find out how much Stamp Duty you’ll pay on your new buy-to-let property with our free and easy Stamp Duty calculator for second homes.

Mortgage Glossary

On this page you’ll find our detailed mortgage terminology glossary. There’s a lot of jargon out there but we’re here to make it easy.

Insurance and Protection with John Charcol

As well as arranging your mortgage, we can help you organise your life insurance and protection. Our experts can find cover tailored to you for your mortgage, income, family and more. Simply visit out Insurance and Protection Hub for all sorts of resources to get you started!

Visit Our Insurance and Protection Hub

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Talk to Our Experts Today

0330 433 2927

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