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.