Mortgage rates are likely to stay in the 4-5% range this year but changes to affordability testing gives buyers a boost.
Buy-to-let mortgages and deals
When you're purchasing a property for someone else to live in, the rules around mortgages and stamp duty change.
Buy-to-let mortgages often come with higher interest rates, and interest-only mortgages are a popular choice among landlords.
Let's take a look in more detail.
Explore buy-to-let mortgages
BTL rates: 75% LTV (January 2025)
2 year fix: 4.85%
5 year fix: 4.63%
BTL rates: 60% LTV (January 2025)
2 year fix: 4.7%
5 year fix: 4.46%
How to get a buy-to-let mortgage
To get a buy-to-let mortgage you'll need to:
Have a good credit rating
Have a minimum deposit of 20-25% of the property's value
Prove that your rental income is 25-45% higher than your mortgage repayments
You can approach individual lenders or work with a whole of market broker to find the best deals.
How do buy-to-let mortgages work?
Buy-to-let mortgages are different to normal residential mortgages.
Most work on an interest-only basis, as the monthly repayments are cheaper
This means you'll need to repay the mortgage in full at the end of the term, usually by selling the property
You'll need a 20-25% deposit, with the best rates opening up at 40%
Upfront mortgage fees tend to be expensive, £2,000 is not unusual
Your rental income will need to be 25-45% more than your mortgage repayments
Get the best buy-to-let mortgage deal
You can research and approach individual banks and building societies to discover their best rates.
However most landlords tend to use whole-of-market mortgage brokers to secure the best deals available.
Some lenders only work through brokers, so they often have access to deals that aren't readily available on the high street.
Brokers can also be dab hands at navigating complex financial situations. For example if your job situation isn't straightforward or you have multiple properties in your portfolio.
Buy-to-let mortgages
Allow award-winning Mojo to show you the best rates available to you. A whole-of-market broker, Mojo work with over 70 lenders. And they won't charge you a penny for their services.
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Tell Mojo about yourself and your situation so that they can get to know you, provide you with advice and ensure you’re eligible. It will take around 8 minutes.
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Leave it with Mojo; the paperwork, the application, the bank poking and protection insurance, they'll handle all the stress. And if you’re remortgaging they could save you a lot of money.
What are the interest rates on buy-to-let mortgages?
Discover the latest rates available.
Buy-to-let stamp duty rates
Buy-to-let second home owners and limited companies pay a 3% surcharge on top of residential SDLT rates. Work out how much you'll need to pay with our stamp duty calculator.
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Buy-to-let mortgages: frequently asked questions
We know getting a buy-to-let mortgage can seem complicated, so we've listed the questions we hear all the time.
How much is a buy-to-let mortgage?
Buy-to-let mortgages tend to be more expensive than standard mortgages, because they are seen as a riskier loan by lenders.
Typically, buy-to-let mortgages operate at 1% above the average homeowner mortgage.
Landlords will want to avoid 'void' periods, where the property is empty and no one is paying the rent, to ensure they can keep paying the mortgage.
What happens if I don't change my mortgage to buy-to let?
Letting your property without notifying or asking permission from your mortgage lender is in breech of your mortgage contract and is technically mortgage fraud.
Your lender could charge additional fees and penalties, including charging you extra interest, if you do this.
And in a worst case scenario, they may demand you repay your mortgage in full.
How to compare the best buy-to-let mortgage rates
The best way to compare the best buy-to-let mortgage rates is to go with a whole-of-market broker.
They'll have access to the best deals available, including ones not readily available on the high street, and can find the best deals available for you.
They'll need to learn about your situation, the deposit size you have and the amount of rental income you're planning to generate from the property.
How many buy-to-let mortgages can you have?
In theory, you can have as may buy-to-let mortgages as you like, as long as you can prove you can afford to pay the repayments.
But generally speaking, most lenders will limit the amount of buy-to-let mortgages they issue to between 3-5 properties, because they are generally seen as a higher risk than homeowner mortgages.
Some lenders will also impose caps on the amount they are prepared to lend, for example up to £3.5m.
Are mortgage interest rates higher for buy-to-let?
Yes. Mortgage interest rates tend to be around 1% higher for buy-to-let properties than they are for standard homeowner properties.
Can I change my mortgage to buy-to-let?
Yes. You simply need to approach your lender and ask them if they can change your mortgage to a buy-to-let mortgage.
You will need to ensure you have at least 20-25% equity in your home in order to do this, possibly more if you have a poor credit rating.