Buy to let and let to buy

Advice, reassurance and support, every step of the way.

Buy to let

A buy to let mortgage is a loan secured on a property that you will let out. You can rent the property to a family, to individuals or to a company.

When compared to a main residence mortgage you will find that the mortgage rates and fees are typically higher on a buy to let mortgage. A loan amount for a buy to let mortgage is based both your income and also on the rental income the property will achieve.

As a whole of market mortgage broker, we have access to a huge range of products and each lender has their own varying criteria. As a rule the following lending terms apply for buy to let mortgages:

  • Maximum loan to value up to 80%

  • Interest only or capital and interest

  • Loan based on the subject property rental income and/or your personal income

  • Fixed, tracker and variable rate options

The rate of stamp duty for buy to let is higher than for your main residence. An increase of 5% is applied to each banding of stamp duty. Please refer to the table below:

The Financial Conduct Authority does not regulate some forms of buy-to-let. Your home may be repossessed if you do not keep up repayments on your mortgage.

How much stamp duty will I pay?

Let to buy

Let-To-Buy mortgages allow the borrower to remortgage their existing property in order to raise funds towards the purchase of a new home.

The existing property is then rented to tenants resulting in a rental income which can be used to offset/reduce the cost of the mortgage on the new home.

When is a Let-To-Buy appropriate?

Let-To-Buy mortgages are used mainly by people needing to quickly release funds from their existing homes in order to proceed with the purchase of a new residence. For example when people to need to relocate for work but may be returning to the area, and their home, in the future.

Let-To-Buy mortgages can also be the ideal product for people wanting to take the first steps in building a property portfolio for investment.

Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

Buy to Let & Let to Buy FAQs

  • A buy-to-let mortgage is designed for properties that will be rented out rather than lived in by the owner. Lenders assess both your income and the expected rental income when determining loan eligibility.

  • Most lenders require a minimum deposit of 20–25% of the property value, though some may allow as little as 15% or require as much as 40% for better rates.

  • It is possible but more difficult. Lenders often prefer applicants with existing property ownership experience. However, we can help find lenders that cater to first-time buyers.

  • Interest rates for buy-to-let mortgages are generally higher than those for residential mortgages. The exact rate depends on the loan-to-value ratio, your financial situation, and the lender’s criteria.

  • Yes, many buy-to-let mortgages are interest-only, meaning you only pay the interest each month and repay the full loan amount at the end of the mortgage term. Capital and interest repayment options are also available.

  • Lenders require the rental income to be at least 125–145% of the monthly mortgage repayment, depending on your tax status and lender requirements.

  • Yes, buy-to-let properties are subject to higher stamp duty rates, with a 5% surcharge added to each tax band. We can help calculate the exact amount you’ll need to pay.

  • No, a buy-to-let mortgage is specifically for rental properties. If you wish to live in the property, you’ll need to switch to a residential mortgage.

Investing in property or renting out your current home?

TGD Mortgages provides expert advice on buy-to-let and let-to-buy mortgages. Contact us today for a free, no-obligation initial consultation!

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