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What is a buy-to-let mortgage? What does buy-to-let mean?

A buy-to-let mortgage is a mortgage on a residential property that you intend to rent out.

You can get a buy-to-let mortgage on a property you're buying, or a property you already own and want to turn into a rental (like a property you've inherited).

In most cases, your buy-to-let mortgage will be considered a type of commercial loan. Having said that, a small number will be consider personal finance and will therefore be regulated by the Financial Conduct Authority.

If you're purchasing a commercial unit, office or other business premises as an investment and intend to rent it out, see our range of Commercial mortgages.


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Common questions about buy-to-let mortgages

Why choose a Together Buy to Let mortgage? 

We have over four decades of lending experience, and have helped thousands of landlords to access the finance they need. Over the years, we've honed our common-sense approach; one which enables us to be more flexible and pragmatic when reviewing your application.

We recognise that many of the most lucrative rental properties are those which some lenders may describe as 'difficult to mortgage', because of their position, condition, or current use. It's why we use people, not computers, to make the final lending decision. And means we can often lend when others can't.

How do buy-to-let mortgages work? 

Buy-to-let mortgages work much like any other mortgage. You put down a deposit, and borrow the balance of the price of the property as a mortgage.

There are usually two types: interest-only, and capital repayment.

With an interest-only mortgage, your monthly payments are smaller because they only cover the interest you’re incurring each month – and the balance you borrowed initially must be repaid as a lump sum, when the term of your mortgage ends.

With a capital repayment mortgage, your monthly payments are larger and cover both the interest and what you initially borrowed – so when the term ends, you own the property outright.

In addition, you can choose between a fixed-rate and a variable-rate mortgage. If you choose a fixed-rate, your repayments are locked-in for a set period at the start of your mortgage, while on a variable-rate mortgages the interest can be varied by the lender (after giving you a bit of notice).

Because of this, fixed-rate mortgages offer more peace of mind, but tend to have higher interest rates.

Am I eligible for a buy-to-let mortgage with Together? 

We don't have any minimum income requirements, and if your rental income sufficiently exceeds your monthly payments we won't insist on an affordability assessment. If you've not yet bought the property, we can use an assessment of the potential rental income from an estate agent.

If we do need to conduct an affordability assessment, we'll take into account all of your income – including up to 90% of projected rent, rent from other properties you own, pension income, and wages from your day job (if you have one).

We're happy to lend to first-time landlords, limited companies, property professionals, expats and others.

If you’re unsure if your circumstances mean you qualify, get in touch with us to discuss your eligibility. Enquire today.

How much deposit is needed for a buy-to-let mortgage with Together? 

We have several Buy to Let mortgage products, and the minimum deposit (or equity, if you're remortgaging) we insist on varies based on the property and your circumstances. As an absolute minimum, you'll need to put in 25% of the property's value.

However, if you also own other properties and have sufficient equity, we may be able to use these as additional security to lend you 100% of the value of your new purchase.

How much can I borrow for a buy-to-let mortgage with Together? 

We offer buy-to-let mortgages of anywhere from £50,000 to £2m – and sometimes more! If you want to borrow a large amount (i.e. over £500,000) we may or may not insist on you putting in a larger deposit or more equity.

Can I change my mortgage to a buy-to-let mortgage? 

If you've already got a mortgage on your home and want to rent it out, you may not need to do anything. Speak to your existing mortgage provider to find out; some lenders will give their consent, and some will insist you switch to a specific buy-to-let mortgage product. It often depends on the circumstances.

If they're insisting you switch, remember you have the option to shop around. Make sure you check if there are any Early Repayment Charges associated with switching to another lender.

Can I move into my buy-to-let property? 

If you own a buy-to-let property and need to move into it, speak to your mortgage provider about changing your buy-to-let mortgage to a residential mortgage.

If they won’t let you do this, it’s time to shop around – as you may be in breach of the terms of your buy-to-let mortgage if you move in without their knowledge.

How do you decide my interest rate? 

The rate you're offered may be influenced by several factors, including:

  • The type of rental property you have (e.g. long-term rental, or short-term holiday let).
  • The value of the property you're using to secure the mortgage.
  • How much you need to borrow (both in total, and as a percentage of your property's value).
  • Your credit history (but not your credit score).
How many buy-to-let mortgages can you have? 

There’s no strict limit, but some mortgage lenders will put a limit on how many mortgages (or how much you’ve borrowed overall) they’ll let you have. Here at Together, we have no such limits.

Some investors who own lots of rental properties may instead decide to have one very large mortgage that covers all of them, so they have a single monthly payment to meet.

This is known as a portfolio buy-to-let mortgage and is secured against all of their properties at the same time, and is something we also offer.

Can a first-time buyer have a buy-to-let mortgage? 

Yes, we’ll consider applications from first-time buyers for a Together Buy to Let mortgage and treat them the same as anyone else. This includes both first-time property investors and people who’ve never owned their own home as well.

What fees will I have to pay on a Together Buy to Let mortgage? 

We charge an Arrangement Fee, and some of our Buy to Let mortgages include an Early Repayment Charge, which you'll pay if you elect to remortgage with another lender or repay your loan in full before the term ends.

We also charge a Redemption Administration Fee when you 'redeem' (i.e. fully repay) your mortgage, to cover costs associated with closing your account and dispensing our legal claim to your property.

All of these fees can vary, so we'll ensure that the fees that apply to your particular mortgage are clearly explained before you sign on the dotted line.

Other fees and charges may be applied to your account during the life of your mortgage, in relation to the management of your account (for instance, if you fall behind on your monthly payments). These are all explained in our Tariff of Charges.

 

Check your eligibility & enquire

At Together, our flexible approach means that we can often lend where others can't. If you fit our criteria, we'll do everything we can to make it happen.

To be eligible to borrow from Together, you need to be:

  • Based in the UK
  • Aged between 18 and 85
  • Not on furlough or a secured deferred payment plan
  • Not at risk of redundancy

Approval is based on a credit check and an assessment of your individual circumstances.

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Enquire today for a callback from a member of our friendly, expert team.


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Feefo Trust Service Award logo for 2021

Any property used as security, including your home, may be repossessed if you do not keep up payments on your mortgage.

Together offer a range of regulated products and unregulated products. Together Personal Finance Limited are authorised and regulated by the Financial Conduct Authority (FCA) and offer products including (but not limited to) Personal mortgages, Secured loans, Consumer Buy to Let mortgages and regulated Bridging loans.

Our unregulated products are provided by Together Commercial Finance Limited and include (but are not limited) to unregulated Bridging loans, Buy to Let mortgages, Auction finance and Development finance.

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