Put simply, a buy to let mortgage - or BTL mortgage - lets you borrow money to buy a house that you're going to invest in and rent out. It's sometimes known as a landlord mortgage too, and allows you to let your property to tenants, students or as a holiday home.

It's different from a residential mortgage that you'd take out for a home you're going to live in. The tax treatment is different too because lenders and the government see being a landlord like running a business.

How to choose a buy to let mortgage

There's a lot of choice in the buy to let mortgage (or 'let to buy mortgage') market.

The deal you get will depend on how much deposit you've saved up, and how much you want to borrow. So if you want to buy to let, it's a good idea to start saving up for a deposit so you can get the best buy to let mortgage rates.

If you're looking for the best buy to let mortgage, don't just go for the headline rate. Check carefully to see whether you'll have to pay a fee to take the mortgage out. You'll probably need to remortgage in a few years, so check what charges are involved if you switch your buy to let mortgage or providers.

The cheapest buy to let deals will give you a low interest rate and low fees for taking the mortgage out - or they might even be fee-free. Plus, there'll be a low early repayment charge when you remortgage.

How to compare buy to let mortgages

If you want a buy to let mortgage, compare deals to find the best bet to let mortgage rates. You can compare buy to let mortgages using our comparison table above.

When you're looking at the buy to let mortgage comparison table, you'll see that each lender has different buy to let mortgage criteria.

One of the key things to look out for in buy to let mortgages is the maximum loan-to-value (LTV) rate. The LTV is the difference between the value of the property, and how much deposit you've saved up. If a lender says the maximum LTV they'll accept is 75%, that means you'll need a deposit of at least 25% of the property's value.

Buy to let mortgage rates

Even the best buy to let mortgage rates tend to be higher than normal residential mortgages.

That's because there's more risk to the lender that you won't be able to make your mortgage repayments. This could happen if you can't find suitable tenants, the property's empty for longer than you planned, or your tenants stop paying rent. Because of this, buy to let mortgage deals aren't usually as good as residential mortgage deals.

Buy to let mortgages often have higher interest rates and fees for taking the mortgage out. They usually need a higher deposit too - at least 25% of the property's value.

To get the best buy to let mortgages, you'll often need an even bigger deposit. This can be around 40%, meaning they have an LTV of 60%. So your buy to let deposit is very important and it's best to save up as much as you can.

Here's how buy to let mortgages work and how much they cost.

What's the best buy to let mortgage?

The best buy to let mortgage is one that's right for your own personal circumstances. It should also give competitive BTL mortgage rates, have a low or no arrangement fee, and be flexible enough to let you switch at a later date.

If you're thinking of buying a buy to let property, you can use our buy to let mortgage comparison tables to find some of the best buy to let mortgages, UK wide.

Each lender in the comparison table is shown with:

  • the maximum LTV they'll accept

  • the initial rate that's on offer and the period it covers (for example, five years)

  • the lender's Standard Variable Rate (SVR) which is the interest rate you'll pay once the initial or fixed period ends

  • the Annual Percentage Rate of Change (APRC). This shows what your total mortgage costs would be, as a percentage, if you keep the mortgage for its full term.

By comparing your options, you'll be able to find the best buy to let rates and deals overall.

Buy to let mortgage deposit: How much do I need?

When you're searching for the best buy to let mortgage, the lender will look at the size of the buy to let mortgage deposit you've saved up.

This is another area where buy to let mortgages differ from normal mortgages. When you're buying your own home to live in, lenders accept a much higher LTV rate. This could be as high as 95%. But the situation with a deposit for buy to let properties is quite different.

Most buy to let mortgages require a buy to let deposit of at least 25%, making the maximum LTV much lower at 75%.

What other differences are there between buy to let mortgages and residential mortgages?

A buy to let mortgage deposit needs to be much larger than a residential one. But there are other differences between BTL mortgages and residential mortgages.

Most residential mortgages are repayment mortgages. That means you pay off some of the loan and some interest each month. But it's rare to get a buy to let repayment mortgage. Most of the time, a BTL mortgage is based on just paying the cost of the interest each month. It's known as a buy to let interest only mortgage.

An interest only buy to let mortgage means you'll need to have a plan for how you'll pay off the outstanding amount of the loan at the end of the mortgage term.

Buy to let costs

It can be more expensive to buy a rental property than a home to live in. You'll need to factor this into your overall buy to let costs. It's important to find the best BTL mortgage you can.

Buy to let mortgage rates and arrangement fees may be higher, and you'll also have to pay more stamp duty. Stamp duty is a tax you pay when you buy a property. You'll also have to pay the normal costs of conveyancing, including solicitor's and surveyor's fees.

Stamp duty rules were temporarily changed in July 2020, where Stamp Duty us exempt for the first 500,000 of the value of your property. This means that if your property costs less than 500,000, you will not have to pay any Stamp Duty. These rules will be in place until March 31, 2021.

Your lender will expect your rental payments to cover the interest on your buy to rent mortgage - and more. Bear this in mind when you do your initial buy to let mortgage calculations.

Learn more about the costs of buy to let mortgages.

Other buy to let costs

When you're working out the costs of a buy to let mortgage, as well as buy to let rates and fees, you'll also need to factor in:

  • any charges your letting agent will make

  • necessary repairs, renovations and inspections

  • regular testing of gas and electrical equipment to make sure it's safe

  • whether you plan to let the property furnished or unfurnished.

Buy to let tax and stamp duty

The way landlords are taxed has changed a lot in recent years. New taxes on buy to let landlords are being phased in.

Before, you could offset your mortgage interest costs and other costs against the buy to let rental income you received. But you can't do this anymore.

Stamp duty rates on buy to let properties are also higher than on residential property purchases these days. When you purchase a buy to let property that's worth over 40,000, you have to pay stamp duty. It costs 3% more than the stamp duty on residential properties.

Learn more about stamp duty and tax on buy to let properties.

Buy to let insurance

Landlord insurance is different from normal home insurance. It isn't legally required, but your lender might ask you to take it out as a condition of your buy to let mortgage.

Buy to let insurance can protect you in a range of scenarios. This could include damage to buildings or contents, being taken to court by your tenants, or being unable to rent it your property out for a period.

Here's how to get insurance for landlords to cover the risks of your buy to let property.

Buy to let remortgages

If you have a buy to let property, you'll need to arrange a buy to let remortgage when your current deal ends. It's unlikely that you'll want to stay on the lender's SVR, which is what your buy to let mortgage would automatically default to at the end of your term. That's because it's usually much more expensive than the competitive buy to let rates available if you remortgage.

Use our buy to let remortgage comparison table to find a mortgage that's right for you.

When you're thinking about getting a BTL property to rent out, you'll need to make sure the rent income covers the cost of your mortgage payments. It should also cover the expense of running and maintaining the property.

Some landlords make money from the rent they charge. Others benefit from the appreciation in the value of the property itself. And some benefit from both.

How investing in property with buy to let works.

Buy to let mortgage FAQs


Can I get an interest only BTL mortgage?


Yes, many buy to let mortgage are interest only. They let you pay back only the interest owed on your mortgage, not the balance; here is how they work.


What is the maximum age I can get a BTL mortgage?


Some lenders offer mortgages that last until you are 85, but others have strict age restrictions. Here is how to get a mortgage when you are older.


Do I need a deposit to get a mortgage?


Yes, most mortgages need a deposit, and buy to let mortgages usually require a higher amount than when you buy your own home.


Do I need a specialist mortgage for a buy to let?


Yes, because you cannot use a residential mortgage for an investment property. The mortgages in this comparison can be used for buy to let.

About our mortgage comparison


Who do we include in this comparison?


We include mortgages from every lender in the UK. They are all from lenders regulated by the Financial Conduct Authority. Here is more information about how our website works.


How do we make money from our comparison?


We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.

Last updated: 10 September, 2020