Question 1

Can I remortgage a residential to a buy-to-let mortgage?

Accepted Answer

Yes you can. If you only temporarily want to let out your residential property you can simply apply for a ‘consent to let’ from your lender. This allows you to let out a residential property, usually for a fairly short set period of time. This can be helpful if you’re travelling or if you want to rent out your property whilst you remortgage onto a buy-to-let mortgage permanently.

Question 2

Can I remortgage a buy-to-let property to a residential mortgage?

Accepted Answer

Yes it’s possible to convert a buy-to-let mortgage to a standard residential mortgage. Keep in mind that you won’t be able to live in the property until the mortgage deed has been transferred, however.

Question 3

Can I switch my buy-to-let mortgage to repayment from interest-only?

Accepted Answer

Both repayment and interest-only mortgage options are available to buy-to-let customers, although not all lenders necessarily offer both options. While most customers prefer to pay interest-only repayments on investment property, you can either:

take out a new buy-to-let mortgage with a capital repayment option to purchase a investment property, or
switch to capital repayment, should you already have an interest-only mortgage

Question 4

What is stress testing in buy-to-let mortgages?

Accepted Answer

Lenders 'stress test' buy-to-let mortgages to ensure that the borrower can afford the mortgage repayments in the event that rental income is paused. For example, if you have no tenants in place.

Stress testing has been more stringent in recent years due to the high interest rate environment and cost of living crisis, which led to landlords' income been seen to be more vulnerable. However, in 2024 improved confidence in the buy-to-let market can be seen as small rate reductions have begun.

Question 5

Can I remortgage a limited company buy-to-let mortgage?

Accepted Answer

Whether you have a buy-to-let mortgage in your own name or purchase through a limited company buy-to-let, it’s possible to remortgage at the end of the term, just like any other mortgage.

Keep in mind, however, that not all lenders offer limited company buy-to-let mortgages, so your pool of lenders will be limited to those that do when it comes to remortgaging.

Question 6

How long does it take to remortgage a buy-to-let?

Accepted Answer

A buy-to-let remortgage takes around four to eight weeks to complete, depending on your circumstances and the complexity of the property. Leasehold properties can take longer, much like with residential property.

Question 7

How much of a deposit do you need for a consumer buy-to-let mortgage?

Accepted Answer

As this is a type of buy-to-let mortgage, the deposit requirement will typically be a minimum of 25%, however, as you will typically be remortgaging when you take out this type of mortgage, this can often be taken from the equity in the property, rather than having to provide a cash deposit for this amount. If your equity does not cover the deposit requirement, you may need to add to it with a cash deposit, however.

Question 8

Can you remortgage with a consumer buy-to-let mortgage?

Accepted Answer

The vast majority of consumer buy-to-let mortgages will be remortgages, given that you are supposed to already own the property and have become an ‘accidental landlord’.  If you already have a consumer buy-to-let mortgage, however, you will be able to remortgage your buy-to-let home onto another deal, as you would with any other mortgage product.  The same rules will still apply, so if you’re in a fixed-term deal, you will likely have to pay early repayment charges (ERCs) if you remortgage before the end of the term.

Question 9

Will I need landlord insurance on a consumer buy-to-let mortgage?

Accepted Answer

Buildings insurance on the property will be essential to your mortgage acceptance, however, landlords insurance is usually optional from the mortgage lender’s perspective. This could be a sensible option for anyone planning to rent out their property, however, as it can cover your mortgage repayments when the property is vacant or your tenants are unable/unwilling to pay their rent.

Question 10

Are consumer buy-to-let mortgages regulated?

Accepted Answer

Yes they are. A standard buy-to-let mortgage, on the other hand, is not regulated by the FCA as it's considered a commercial product.

Question 11

What’s the difference between a buy-to-let and a residential mortgage?

Accepted Answer

A residential mortgage is a loan you get to buy a property that you’ll live in yourself. A buy-to-let mortgage is when you borrow money for a property you wish to rent out to tenants.

Question 12

Should I get a repayment or interest-only buy-to-let mortgage?

Accepted Answer

Most landlords choose an interest-only mortgage and use the rental income to invest or save, paying back the entire mortgage later. If you take this approach, you must make sure you have a payment plan to cover the whole mortgage back when the mortgage term ends, as the lender will want to be confident you will be able to repay the loan.  If you choose a repayment mortgage, which is usually used to buy a residential home to live in, you’ll own the property outright at the end of the deal, but your monthly repayments will be higher.

Question 13

What happens at the end of my interest-only buy-to-let mortgage?

Accepted Answer

You will need to repay the loan capital (the full amount you borrowed) at the end of the mortgage term, as you will have only paid the interest. Lenders will expect you to have a plan in place for this when you take out the mortgage, and it often involves selling the rental property on. It’s important to consider that if the cost of your property drops, then the resale income may not necessarily cover what you have borrowed. A back up plan is always a good idea, no matter how you plan to repay the capital.

Question 14

How many buy to let mortgages can I have?

Accepted Answer

There is no limit to the number of buy-to-let mortgages you can haven assuming you’re able to meet affordability for them all. That said, some lenders are reluctant to lend to portfolio landlords (those with more than 4 active buy-to-let mortgages) and it will get more difficult to borrow, the more properties you own.  There are specialist lenders that are able to accommodate portfolio landlords, however, and they are often happy to use existing investment properties in place of, or addition to the deposit, in order to secure your borrowing.

Question 15

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

Accepted Answer

Yes, you can. It’s possible to remortgage a residential property onto a buy-to-let mortgage, so long as the lender feels that both yourself and the property meet the criteria of buy-to-let lending.  It’s also possible to use a let-to-buy arrangement, which is where you take out two mortgages at the same time. This involves remortgaging your current home to a buy-to-let so that you can keep it as a rental property, whilst taking out a new mortgage to buy another home to live in.

Question 16

Can I rent out a property on a residential mortgage?

Accepted Answer

No you can’t. Residential mortgages are intended for the purchase of a home you are going to live in yourself.  If you ignore the terms of your mortgage and let out a property that has a residential mortgage without speaking to your lender, you’ll be committing ‘mortgage fraud’. In these circumstances, it’s possible that your lender will demand that the mortgage is repaid immediately, or repossess the property if you’re unable to do so.  If you would like to try out being a buy-to-let landlord with your residential home before committing to it for the long term, it’s possible to look at getting a consent to let on your residential mortgage. This will give you a short term (usually 6-12 months) allowance to let out your home before you need to remortgage onto a buy-to-let product.

Question 17

Do I need a buy to let mortgage if I rent my house through AirBnB?

Accepted Answer

It really depends on how you intend to offer your home on AirBnB, but you may not always need a buy-to-let mortgage. Some lenders will allow you to rent part of your home, perhaps a room or two, on an AirBnB basis with a standard residential mortgage. This is as long as you keep to their terms on the maximum number of days per year you can do this. It’s important to speak to your lender first, as this may still be breaching the terms and conditions of your mortgage. Whether you need a holiday let mortgage or a buy-to-let mortgage will depend on: If you intend to offer your property as a whole How long you intend to let it out to any one individual How many maximum days you will offer your property to let throughout the year

Question 18

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

Accepted Answer

Loan size is usually based on the potential rental income from the property that you’re buying, rather than your personal income. But you'll still have an income assessment to ensure you'll be able to repay the loan when your property is vacant. An ARLA registered letting agent should be able to advise you about local rental property prices in the area you’re looking to buy, or you could research this on property rental sites, such as Zoopla.

Question 19

Can I get a buy-to-let mortgage as a first time buyer?

Accepted Answer

It can be more difficult, as some lenders prefer that you have experience of property ownership before you move into BTL mortgages. However, there are certainly lenders out there that will approve buy-to-let mortgages for first-time buyers.  Keep in mind that you won't benefit from the first-time buyer stamp duty relief if you're purchasing buy-to-let property.

Question 20

Can I live in a buy-to-let house that I own?

Accepted Answer

No you can't, this would be breaking the terms of a BTL mortgage. Buy-to-let mortgages are only suitable for property that you intend to rent out as a landlord. Most mortgage terms will even restrict you living in them during the renovation period.

Question 21

Is a buy-to-let mortgage cheaper than a residential mortgage?

Accepted Answer

No it isn't. In fact, as a BTL mortgage is a commercial product, buy-to-let interest rates are typically higher than that of an equivalent mortgage on a residential property.  The confusion may lie in the fact that most landlords use interest-only mortgages for buy-to-let purchases, which is cheaper to repay monthly. However, this means that at the end of the mortgage term you'd still owe the full loan, as you'll only have been repaying interest, not capital.

Question 22

How can I compare the best buy-to-let mortgage rates?

Accepted Answer

The best way to compare BTL mortgage rates is going to be to cast your net as wide as possible. Each lender will have different criteria, so not every buy-to-let mortgage will necessarily be suitable for you.  Then of course, the more lenders you consider, the more chance you have of finding a competitive rate that does suit your needs. A broker with experience in this area, like our partners at Mojo mortgages, will be well-placed to help you.

Question 23

Is a BTL mortgage worth it in 2024?

Accepted Answer

There's no doubt it's become more difficult for landlords to make a profit in recent years. Independent landlords in particular have not only been subject to higher buy-to-let interest rates, but also enjoy fewer tax benefits than portfolio landlord businesses. That said, if you know where to invest, it's still perfectly possible to make a living from residential rental property. Speaking to a broker who specialises in buy-to-let mortgages can help. You could also check out our buy-to-let facts and statistics article for guidance.

Question 24

What is the Deregulation Act 2015?

Accepted Answer

This is a wide-ranging act that contains a few key points relevant to those becoming a landlord. Most notably: The Tenancy Deposit Scheme – which places the requirement to hold deposits in a government-approved scheme. Section 21 – Specifies legal duties which landlords must meet in order to be able to serve tenants with a Section 21 notice (eviction notice). It also states that any landlord served with an improvement notice cannot issues a section 21 within six months How to rent: the checklist for renting in England booklet - this must be provided to all tenants at the start of any AST (assured shorthold tenancy)

Question 25

Can I rent to tenants receiving benefits?

Accepted Answer

Yes you can, and shortly changes are expected that won’t allow you to select tenants based on how they receive their income, amongst other previous allowable restrictions.   There are very few differences between a tenant receiving benefits and those who aren’t, for example, the tenancy agreement remains the same and landlord insurance should still be relevant, although it’s worth making sure your insurance provider is aware of the tenant type.  In fact, there is some additional financial security involved in renting to those receiving benefits to cover their living costs. It’s possible to request payment directly from the local authority, should they fall into arrears of more than eight weeks.

Question 26

What is The Homes (Fitness for Human Habitation) Act?

Accepted Answer

When you’re considering your health and safety responsibilities as a landlord, this is a great piece of legislation to look at for guidance to ensure you meet minimum legal requirements.  The act gives tenants in England legal power to take action against landlords who provide accommodation that is not considered by the courts to be fit for human habitation.

Question 27

Should I use a letting agent?

Accepted Answer

This is really down to personal preference, although many landlords find that letting agents are worth the additional costs, given the amount of time needed to manage your property and tenants effectively. This is even more true of portfolio landlords.  On the other hand, some landlords feel that taking care of the property themselves makes for a better relationship with the tenants and allows them to keep a close eye on maintenance costs.

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