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Buy To Let Mortgage Criteria

If you are looking to rent out a property you already own, a buy-to-let mortgage could be the product for you However, you’ll need to tick a few boxes first.
buy-to-let mortgage criteria

Below, we have a guide for what you need to know about mortgages and the criteria needed to get one. We have also included an FAQ section for the most commonly asked questions about buy-to-let mortgage criteria.

What criteria are assessed with a buy-to-let mortgage?

Many different lenders use the same criteria to assess your mortgage, taking many factors into account. Such factors include:

  • Your income and affordability
  • How much deposit you can put down
  • Your current employment status
  • How old you are
  • Where you live
  • Your current credit score

With YesCanDo being a UK lender, we may require you to be a permanent UK resident or hold a UK passport.

How old do you need to be for a buy to let mortgage?

In order to purchase a buy-to-let property, you must be at least 18 years old. However, most lenders will require applicants to be at least 21 or even 25 before they can receive a mortgage. 

If you may be considering a joint application, then the other applicants must be aged 18 or older.

An individual can normally purchase a buy-to-let property up to the age of 85. Additionally, some lenders will only accept applications from people up to the age of 75. 

There are also some lenders that will accept any age to apply for a buy-to-let mortgage, depending on certain conditions.

What is the affordability criteria?

You can determine if a property is affordable by comparing your annual income with your outgoings. In the case of buy-to-let mortgages, affordability is determined differently. 

Although some lenders require a minimum income of £25,000, not all lenders in the UK require their applicants to have one.

In general, lending institutions require that rental income cover a mortgage by 125-145%. A buy-to-let mortgage application is not treated the same by all lenders, and each lender has varied criteria for evaluating how much they will lend to an applicant.

What is the deposit criteria?

As stated earlier, larger deposits are usually required for buy-to-let mortgages. You may be expected to pay a deposit of at least 15%, but this can be higher depending on the circumstances. 

It is typical for a buy-to-let mortgage to have a 75% loan-to-value ratio; however, specialist lenders out there may be willing to lend up to 80% and even 85% in some cases, but this might require you to run an extensive search on the web to find one.

An amount of deposit is requested by the lender on a number of factors. For example, It is possible to make a mortgage agreement riskier by having bad credit, as this may make the lender demand a bigger down payment on the property.

If you have a problematic credit history, you may want to seek a lender who can offer more flexibility for your buy-to-let mortgage application.

Frequently Asked Questions

In a word, yes! As long as you do it right, buy-to-let can deliver amazing results for you, but you must make sure that you are aware that you don’t always get these results right away, it can take time and hard work does eventually pay off. 

This is due to the higher costs of investments, so buy-to-let typically takes longer to achieve profitable returns compared to other financial investments.

With any buy-to-let mortgage comes with an array of legal requirements that must be met. However, there are certain ones for UK landlords that must also be adhered to. 

  • Landlord insurance – If you own a buy-to-let property, your lender may insist that you carry landlord’s insurance in the event of a fire or flood, for example. If one of these disasters strikes, it will affect your income stream, but landlord’s insurance would cover this for you.
  • Deposit schemes for tenants – Renters must be given details of their deposits within 14 days by landlords when they place them in either an insured account or a custodial administered account.
  • Energy performance certificates – Energy performance certificates are required by law for any UK property that is marketed for sale or rent in the country.
  • Electrical checks – Prior to the start of a new tenancy, a qualified electrician must conduct an electrical safety check of the property.
  • Gas checks – Licensed gas engineers must inspect the gas supply of all UK landlords’ properties every year.
  • Furniture regulations – It is the landlords’ responsibility to ensure that all furnishings comply with the latest fire safety regulations in the UK.

In short, anyone can get a BTL mortgage as long as they are ale to meet the lenders criteria and are able to afford it.

In today’s market, most lenders require that rental income be around 125%-145% of monthly mortgage payments, depending on their criteria. 

Lenders also may require you to be earning a minimum of £25,000 a year, but there are specialist lenders out there who may be able to do it for less or no minimum income at all.

It is important to recognise that every case is unique, however, it is common for buy-to-let purchases to receive a mortgage offer within 3-6 weeks and complete it within 4 weeks after that. 

Of course this doesn’t account for possible delays, so it could be longer until it all finalises, but patience is key, and it will all be worth it in the end when you have your own home.

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Speak to the experts today

With YesCanDo, you can leave the buying and rent of properties to our professional buy-to-let mortgage brokers.
Assisting you with all the paperwork, bank and solicitor chasing, and application processes is what our advisors do best. Saving time and money is easier when you use our NO-FEE services.

Each buy-to-let situation is unique, so we take the time to understand it, and make sure the criteria requirements are filled out correctly. Your buy-to-let mortgage rate will be compared to the whole mortgage market to ensure that you receive the best deal on your rental property financing.

If you have any questions, you can contact us via WhatsApp or you can give us a call at 033 0088 4407.
You can count on our highly rated advice and support for everything mortgage-related.
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