Bad Credit

Buy to Let Mortgage Bad Credit

Barbara Wohlert | Mortgage & Protection Advisor

Updated 21, March 2025

You will be pleased to hear that there are a growing number of mortgage lenders offering Buy to Let mortgages for customers with bad credit.

However, various credit issues can affect your chances of obtaining a Buy to Let mortgage at the application stage.

We will delve into these factors below in more detail so that you are better informed as to what might hinder (or help) your chances of getting the mortgage you want.

What is a buy to let mortgage with bad credit?

A buy to let mortgage with bad credit is a mortgage provided to individuals with bad credit, enabling them to purchase property to rent.

Typically, a normal buy to let mortgage is not appropriate for individuals with bad credit.

For this reason, there are buy to let mortgage providers who cater specifically to those with poor credit.

You can potentially secure a buy to let mortgage with any of the following poor credit scenarios:

Late payments.
Defaults.
Mortgage arrears.
CCJs.
Debt Management Plan (DMP).
IVA.
Bankruptcy.
Repossession.
Use of payday loans.
Low credit score.

Buy to let mortgage lenders for bad credit

Not all lenders process mortgage applications in the same way and their requirements can differ.

If you have bad credit, then it’s true that many lenders will likely not accept your application, but there are potentially many that will.

Typically you can place lenders into two main categories, these are:

Mainstream (high street) lenders.
Specialist lenders (like those that specialise in individuals with poor credit).

The reality is that poor credit can result from a variety of different things and so there is no blanket approach.

Lenders will look at a range of factors including how long ago the adverse credit occurred and how severe it was.

If it was a considerable time ago, then it’s possible that the lender will not take it into account.

Check Today's Best Rates >

High Street vs. Specialist Lenders

High street lenders market their products to people with no credit issues and their advisers are typically only trained and knowledge when discussing their own specific deals.

Therefore, not only are you potentially missing out on thousands of other deals offered from other providers, but they are unlikely to be able to deal with applicants with bad credit.

Not only that but if you approach a traditional high street lender and you have poor credit, you risk being declined, which could have a negative impact on your credit score.

This has the potential to make future applications more difficult.

Why choose a specialist lender?

Lenders that specialise in bad credit are a much more likely source to secure a buy to let mortgage if you have adverse credit.

Typically, specialist lenders will charge higher interest rates and require a larger deposit, but it ultimately all depends on the type of adverse credit issues you have accrued.

Many specialist lenders require you to apply through a mortgage adviser, which can be beneficial since they can often present you with a range of different deals, allowing you to choose the best offer.

Discovering a lender right for your situation will be determined by your financial history and current circumstances.

If you still have further questions or would like assistance, contact or of mortgage brokers today.

How does bad credit impact a buy to let mortgage?

Firstly, it is important to note that your credit score is different from your credit history.

Credit history as the name suggests is a record of your past financial conduct and is usually tracked over six years.

Whereas, a credit score is used by credit reference agencies and is based on specific criteria.

If a lender uses your credit score to assess your application, they will take into consideration factors such as income, age, location and credit behaviours.

Therefore, depending on the criteria the lender is looking for, you may well end up with a good lender score, despite having a poor credit score.

If your credit score is low, you will likely find it more difficult to obtain competitive rates but don’t let that put you off applying.

There are still many options available for Buy to Let mortgages for borrowers with a bad credit score.

Need more information? Read our related quick help guides:

Another impacting factor is the number of credit applications or ‘hits’ there are on your financial record.

Having a substantial number of credit applications against your name can be damaging to your credit score.

Lenders may question why you have so many credit applications on your record and this may raise a concern.

The information that a lender sees when you make a credit application, can be viewed using one of the credit reference agencies available online e.g. Equifax and Experian.

This information can be helpful to you in understanding your credit score.

It may be worth signing up to both agencies as they may not always hold the same information about you.

Remember, that accessing your credit file will not impact your score in any way and can be viewed as many times as you want.

Our expert mortgage specialists are available to help you with any questions you may have about your application.

Check Today's Best Rates >

Mortgage Arrears

When a missed mortgage payment is not paid and a month or more has passed, it is considered as being in arrears.

Just like missed payments on any secured loan, mortgage arrears are taken very seriously by lenders when making their decision on a mortgage application. Mortgage arrears on Buy to Let properties are viewed in the same way.

If the arrears have lasted over a month, it raises a red flag that perhaps there is an issue with repaying loans. This, in turn, has an adverse effect on an applicant’s reliability at the time the mortgage application is made.

In today’s market, it is very common to encounter landlords who have various mortgages for more than one property and for several reasons, they fall into arrears on of the mortgages.

The most common reason for this is down to the property not being let for a significant amount of time.

Therefore, for customers searching for a Buy to Let mortgage with arrears, there are a number of options available to you.

The timing of any such arrears is important. If arrears have been very recent, this is more likely to work against you than if you had arrears a few years ago.

In an application, it is always essential to clarify any mitigating circumstances to give the lender a complete image of why you fell into arrears.

If you paid off the arrears rapidly, it is worth disclosing these documents to demonstrate that you have been able to resolve the case and have done so in a timely manner.

Late Payments

It is not uncommon for people to have missed a payment during their lifetime.

Some lenders operate a zero-tolerance policy too late payments and will decline the mortgage applications based on this whereas others may take a more sympathetic view if the late payments were isolated and occurred a long time ago.

However, one thing that you can be sure of is that a lender will always look at how many late payment records exist on your credit file and how long ago they occurred. This information is imperative to the lender’s decision when considering your Buy to Let mortgage application.

Typically, the fewer late payments recorded on your file, the more access you will have to lenders and better, more competitive rates.

At this point, it is worth mentioning that late payments and arrears are two separate entities. Missed payments are often recorded at the end of a month.

This can help buy some time to settle the payment before it is considered as late.

For example, if your payment was due at the beginning of the month and you paid it in the second or third week, the payment may not be reported to the credit agencies as being late.

Missed or late payments on secured credit such as mortgages are more of an issue to those made on unsecured credit such as phone bills or credit cards.

Check Today's Best Rates >

Defaults

Defaults in the loan file of a borrower are one of Buy to Let’s most popular reasons for bad credit history mortgages, particularly as they remain on your record for six years.

A default notice is a formal letter sent when a certain number of payments on a loan contract have been missed.

At this point, default is generally recorded when a borrower has missed more than three payments.

The good news is that there are more Buy to Let bad credit mortgages for defaulting borrowers than in the past, so it’s possible to find a suitable Buy to Let mortgage with default.

If you have defaulted on payments against a secured loan in the past and are searching for a Buy to Let mortgage, the number of choices available to you will depend on a number of factors, such as how many defaults you have, how late they were recorded and how much they were for.

Lenders will also examine whether the defaults have been paid off, which in financial terms is known as satisfied. Other factors such as the amount of deposit you have available will also be taken into consideration.

Note: Are you looking for commercial property but have a bad credit history? Bad credit commercial mortgages may be an option for you.

CCJs

Just like defaults, there is an increasing number of lenders that will consider providing a Buy to Let mortgage to someone with CCJs registered against their name.

Each lender has its own criteria, but the principal considerations that the lenders will scrutinise are, the value of CCJs, how many you have when they were recorded and if the debt has been satisfied.

In particular, the County Court Judgment date plays a significant role in determining an application’s result.

For instance, if the judgment was registered over two years ago, you are likely to have more options than if the judgment has been registered within the past year.

With that being said, some lenders will consider prospective customers who have had a CCJ registered in their name as recent as within the last few months. Read our full guide on mortgages with a CCJ for more information.

Can I get a Buy to Let mortgage if I’m in a debt management plan?

If you are presently performing debt management or have been in a debt management plan recently, it may be possible for you to get a Buy to Let mortgage.

Contact our specialist mortgage advisors, who are on hand to advise you accordingly if you have any queries about obtaining a Buy to Let mortgage if you are in or have been in a Debt Management Plan.

Can I get a Buy to Let mortgage with IVA?

If you have a current IVA, then you are likely to find it difficult to secure a buy to let mortgage.

But there are still potential ways to secure a mortgage, our mortgage brokers will be able to assist you further.

Lenders will likely want to assess your financial history and ensure that you have been making repayments on time.

Even though an IVA is considered a severe form of bad credit, it shows that you have been willing to take the steps necessary to repair your credit. Specialist lenders will assess your overall financial situation.

How does a low credit score impact a buy to let mortgage?

A credit score isn’t the same as poor credit. So if you have a poor credit score, this should not impact your ability to secure a buy to let mortgage too much.

Your credit file is composed of your credit history and shows your financial activity of the previous six years.

Although, some mortgage lenders may request that you disclose any credit issues that occurred before this period.

Your credit score is determined from a variety of factors, such as your address and age.

If you have moved to multiple addresses or have submitted numerous credit applications over a short period of time, it may have a negative impact on your credit score.

You can potentially have a low credit score without having any credit issues in the past.

Regardless, mortgage providers may consider applicants with a low score to be high risk.

The importance of affordability when applying for a Buy to Let mortgage

When applying for a Buy to Let mortgage with bad credit history, affordability will always be the most important factor taken into consideration by the lender.

Just like any other application for a mortgage, you will have to prove that you can afford the repayments. Buy to Let affordability is based on a combination of the property’s rental revenue and your financial circumstances.

If you have many Buy to Let mortgages, the lender may examine your entire portfolio to ensure that when it comes to borrowing, you are not overstretched.

Where the lease revenue is not enough, the maximum available loan will be reduced to suit the calculation.

Some lenders, however, enable you to supplement the achievable rental revenue with your own personal income.

How much deposit will I need for a Byt to Let Mortgage with bad credit?

Like any other mortgage, the more deposit you have available to put down, the more options you will have.

Typically, most lenders will consider up to 85% LTV for buy to let mortgages.

Start your application for a Buy to Let mortgage today

If you’re thinking of becoming a landlord or want to switch to a better deal with your current Buy to Let mortgage, contact our expert mortgage advisors today to discuss your options and begin your application.

Check Today's Best Rates >

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

Buy To Let

Requirements for Buy To Let Mortgages UK

Barbara Wohlert | Mortgage & Protection Advisor

Updated 21, March 2025

What is a Buy to Let Mortgage?

Before we go into eligibility criteria, required deposits etc. first you should know what a buy to let mortgage is, to see if it something that is attractive to you and your circumstances.

Well, a buy to let mortgage is just as it sounds – it is a mortgage that allows you to buy a property and rent it out and potentially build a portfolio of properties.

Most lenders will offer this type of mortgage, but it is likely that interest rates and fees will be higher than a traditional mortgage as they are considered to be higher risk.

Similar to the residential mortgage when it comes to the legal stuff, the buy to let mortgage are most often agreed upon on an interest-only basis, with the rental income being used to make the mortgage payments.

However, buy to let mortgages often have different eligibility criteria and will take into account if the investment is viable.

The amount that can be generated from renting the property will be a key factor, as it should be able to cover the monthly mortgage payments by 125%.

For example, if your mortgage payments are £500 a month, your rental income will have to be £625 a month. Some lenders have other calculations.

Eligibility Criteria for a Buy to Let Mortgage

If you think a buy to let mortgage might suit your needs, then you really need to know the eligibility criteria and make sure you tick all the right boxes before applying.

Your lender will take the following into consideration:

Credit History

A poor or limited credit history does not necessarily rule you out of a buy to let mortgage. Yes, it is true that many vendors are not keen to lend to those with a poor or no credit history, CCJs, IVAs, or a history of late payments.

However, there are specialist lenders out there that are willing to lend to those with a bad credit rating.

They may require a larger deposit and assurances that you can make the monthly payments, but they will do their best to find the deal that fits in with your circumstances.

Affordability and Income

For a buy to let mortgage, your lender may have a minimum income requirement for the buyer, particularly if you are becoming a landlord for the first time.

The usual income requirement for most lenders is £25,000, but there are lenders that will accept a lower personal income.

Furthermore, you may be able to find a lender that will have no income requirements, going on the rental potential of the property alone. This is as long as you can gain monthly payments that are 125% of the monthly mortgage payments.

Your income type may also be taken into consideration. It is not to say that you won’t be able to get a deal if you are a contractor, self-employed, or receiving a pension or other benefits. Those who are self-employed are usually expected to provide 2-3 years’ worth of accounts or tax returns, and a few months of bank statements.

Additionally, if a part of your monthly or yearly income comes from the likes of commission, bonuses, or benefits, you may need to search out a specialist lender that will take these supplements to an income into an account when making a decision.

Finally, a mortgage advisor will often make an assessment of your outgoings to show the disposable income you have at the end of each month.

If you have a large number of outgoings or existing loans (such as a lease on a car), your lender may implement a cap on how much you can borrow.

Deposit

Buy to let mortgages tend to require larger deposits than a standard residential mortgage. Whereas is not unusual to get a residential mortgage with just a 5% deposit, for a buy to let mortgage you may need as much as 25% deposit to be accepted.

However, there are some specialist lenders that will offer you 80% or 85% buy to let mortgage if certain criteria are met. Therefore, it is important to raise as large a deposit as possible, if you are considering a buy to let property.

Age

Age can be an eligibility factor with some lenders of buy to let mortgages. The minimum age for those applying for a mortgage is 18, but some lenders may have restrictions of 21 years of age or even 25 as the risk is lower. Furthermore, some mortgage providers may be unwilling to lend to applicants over a certain age, with a common age restriction being 75. However, some mortgage providers will lend to those up to 85 years of age, and some may not have any age restrictions at all.

Property Usage

Usually, lending for a single tenancy is relatively straightforward. However, it may be more complicated if your buy to let mortgage is for a holiday let, short-term let, and house with multiple occupants (HMO).

If you are planning on buying for an HMO you may need a special license and more importantly, your choice of mortgage lenders will be pretty limited. Talk with a whole of market mortgage advisor to see what deals are available to you.

Check Today's Best Rates >

Can a First Time Buyer Secure a Buy to Let Mortgage?

Yes, a first-time buyer can apply for a buy to let mortgage, but your option of lenders could be limited. Most lenders will require you to own your own residential property before agreeing to a buy to let mortgage. So, you can be a first-time landlord, if you already own a home, but for a complete first-time buyer, you will find your options for a buy to let mortgage are minimal. Speak to an experienced mortgage advisor to better understand your entire buy to let options.

Need more information? Read our related quick help guides:

Are all Properties Eligible for a Buy to Let Mortgage?

If you are looking to secure a buy to let mortgage, your lender will want to know that your chosen property is suitable for renting out.

The final decision will come down to the specifics of the property, such as its condition (if you plan on any renovations before renting), its location, and the rental market in the area.

However, most mortgage providers will have restrictions on the buy to let properties they will lend on. These include:

Ex-Local Authority Flats – Securing a mortgage will depend on the location of the property and the number of privately owned flats in the block.
New Build Flats – Usually vendors will require a larger deposit for a new build flat, although this can be dependent on area.
Flats Above Commercial Properties – Such as flats or maisonettes above restaurants. Cafes, shops or offices may have lender restrictions.
High Rise Flats – Lenders often put restrictions on the number of floors in a block of flats.
Holiday Homes – You lender will want to know that your holiday home can generate a sufficient income to cover the mortgage costs all year round.

Our expert mortgage advisors will be able to go into detail with you the types of property which are best suited for buy to let mortgages and where you will be able to get the best deal.

Main Takeaways

A buy to let mortgage is for those looking to buy a property with the intention of renting it out.
You will usually need a bigger deposit for a buy to let mortgage than a standard residential mortgage.
Many lenders will have income requirements that a buyer will have to meet.
Most mortgage providers will want to know that your chosen property can achieve a monthly rental income that is 125% above the mortgage payments.
First-time buyers can secure a buy to let mortgage, but options are limited.
Speak to our expert whole of market mortgage advisors who can discuss all your buy to let mortgage options and find the best deal for you.

Check Today's Best Rates >

Call us today on 03330 90 60 30 or contact us. One of our advisors can talk through all of your options with you.

First Time Buyer

Different Types of Mortgages UK

Kristian Derrick | Director

Updated 21, March 2025

The world of mortgages can be a difficult one to navigate. How do you know that you are choosing the one that best suits you and your circumstances?

A mortgage is not something you can just rush into, you really do need to weigh up your options to ensure that you are getting the best deal – it can save you thousands of pounds.

If you are a first-time buyer it can be particularly overwhelming knowing which mortgage is the one you should be looking at. But, it is important that you do your research before applying for anything to avoid a costly mistake.

The Different Types of Mortgages

You have found the house of your dreams and had your offer accepted, so now it is time to sort out that mortgage. There is a lot of jargon to navigate – fixed-rate, interest-only, tracker etc. – but you really should familiarise yourself with it all before you meet with your mortgage advisor so you know which questions to ask. Here is our guide to the different types of mortgage.

Fixed-rate Mortgage

With a fixed-rate mortgage, your monthly interest rate stays the same for the entire term of the deal, which means that your payment will be the same each month.

Fixed-rate mortgages usually run for terms between 2 and 5 years, after which you will be switched to the lenders SVR (Standard Variable Rate).

This means you should look to switch your rate or remortgage before your fixed rate ends, as your monthly payments may increase significantly if you let them go to the SVR.

The major benefit to a fixed-rate mortgage is that your rate will not rise, no matter what is happening with the market. This makes this particular mortgage a good choice for first-time buyers or those on a tighter budget who need the stability of a payment that is the same every month. On the other side, if interest rates go down, you could be paying a higher monthly payment than you would be on a variable-rate deal.

Check Today's Best Rates >

Tracker Mortgage

For a tracker mortgage, your interest rate is dependent on the Bank of England base rate. Your payment will be the Bank of England base rate plus a further rate, 2.5% for example, and when the base rate changes, so does your payment.

Typically, a tracker mortgage will usually have a deal period once it begins, i.e lasting around two years or longer, after which you will be transferred to your providers SVR if you do not review your options. You may have the option for a ‘lifetime’ tracker mortgage, where your payments are linked to the Bank of England base rate for the entire term of the mortgage.

The major benefit of the tracker mortgage is that your monthly payments will go down if the Bank of England base rate drops (although with Brexit uncertainty, this could be unlikely).

Furthermore, your interest rate is not affected by changes in your lenders SVR, just the base rate of the Bank of England. However, with a tracker mortgage, you will never know what your payments are going to be throughout the term, which can be a little troubling if you have sudden financial troubles.

Check Today's Best Rates >

Discount Mortgage

A discount mortgage can be a little more complicated for some other deals, but you can secure some lower payments at the start of your term. You will pay your lenders standard variable rate (which does not change often), with a fixed discount for a certain period of time. For example, if a lenders SVR is 3.5% and your mortgage is discounted by 1.3%, your rate would be 2.2%

It is fairly common for a discount mortgage to be ‘stepped’, which means you pay the discounted rate for part of the deal and then the higher rate for the remainder of the deal. With a discount mortgage, the good news is that your rate will be lower than the vendor’s SVR for the length of your deal, and if the SVR is low then your payments could be very affordable indeed.

However, your lender may raise their SVR at any time, which will lead to more expensive payments. Look for a discount mortgage which has an interest rate cap which it cannot go above so you can ensure your payments won’t go over a certain amount each month.

Check Today's Best Rates >

Standard Variable Rate (SVR) Mortgage

Every mortgage vendor has its own SVR, which is not dependent on the Bank of England base rate as they set it themselves. As the lenders set their own SVR, the rate will vary from lender to lender, so you will have to shop around to get the best deal. Furthermore, vendors can change their SVR whenever they like, which means that your payments could go up, particularly if there is word that the Bank of England base rate is set to rise.

Check Today's Best Rates >

Interest-only Mortgage

With an interest-only mortgage, each month you are just paying the interest and not any of the capital. The payments will be low, but at the end of the mortgage term, you will still owe the overall balance of what you initially borrowed. With the interest-only, you will need to show that you will able to pay off the mortgage once the term is up.

Check Today's Best Rates >

Repayment Mortgage

The repayment mortgage is much more common than the interest-only mortgage and is where you pay off some of the interest and some of the loan in each monthly payment. The payments will be higher than with an interest-only mortgage, but the upside is that you are building your investment in your home as the monies owed is reducing over the term.

Check Today's Best Rates >

Things to Consider Before Applying for a Mortgage

Before you apply for a mortgage, try to determine which type is best suited to your situation – our expert mortgage advisors can help you with this. The type of mortgage which will be best for you will depend on whether you want to know what your mortgage payments will be every month if you would struggle if your payments were to go up, and if you suspect that your income is likely to change.

Make sure to try to ensure you are aware of the fees involved in buying a property and that your credit score meets the requirements before you apply for a mortgage.

If you want some flexibility in your payments – such as the opportunity to overpay, take payment breaks, or underpay, then ask our advisors about flexible mortgages. Overpaying usually doesn’t require a special mortgage, but often your lender will only let you overpay by a certain amount (say 10%) each year without incurring any penalties. Flexibility in a mortgage usually comes at a price, so you will have to weigh up these extra costs with the benefits.

Types of First Time Buyer Mortgages

For a more in-depth look into some common types of first time buyer mortgages, check out our following guides:

Main Takeaways

You generally have a choice between fixed-rate and variable-rate mortgages. The type which is best for you is dependent on your circumstances.
Discuss your options with a whole of market mortgage advisor, who can advise you on the best deals for your personal situation.
Have an idea in your mind of the monthly payment you can afford and use this to help determine the best mortgage for you.

If you want to overpay, underpay, or take payment breaks as your mortgage advisor or lender about any flexible options you can add to your plan

Buy To Let

Portfolio Landlord Mortgages – UK Comparison

Chris Taylor | Mortgage & Protection Advisor

Updated 21, March 2025

In October 2017, the Prudential Regulation Authority (PRA) made some changes to the way lenders view borrowers who have four or more buy to let properties.

Part of the Bank of England, the PRA regulate around 1,500 banks, building societies, insurers, credit unions and investment firms.

Changes have been made to ensure that lenders only offer buy to let mortgages to landlords who can comfortably afford them. This means that in the future, you may need to provide your lender with additional information about your current income, outgoings, assets and liabilities when applying for a buy to let mortgage.

So, whether you’re a first-time landlord looking to grow your portfolio, or you’re a seasoned buy to let investor, now’s the time to familiarise yourself with the new rules and regulations.

Check Today's Best Rates >

What is a Portfolio Mortgage?

A portfolio mortgage is a type of mortgage offered to landlords with a portfolio of properties.

Portfolio mortgages are positioned in-between buy-to-let mortgages and commercial mortgages. They’re typically interest-only like normal buy-to-let mortgages because they’re still for buy-to-let properties.

What is a Portfolio Landlord?

If you own four or more mortgaged buy to let properties, lenders will class you as a portfolio landlord.

If you own less than four properties classified as a private landlord and only require a normal buy-to-let mortgages or limited company buy-to-let mortgages.

Always remember that lenders only take into account the number of properties you own. This means that if you have four or more rental properties, or if a new purchase will be your fourth one, mortgage lenders will still class you as a portfolio landlord.

What can a portfolio mortgage be used for?

Portfolio mortgages can be used to finance the following:

Normal buy-to-let properties
Limited company buy-to-lets – this would require a limited company portfolio mortgage
Auction properties
Student buy-to-lets
Multiple flats under one freehold
HMO (Houses in Multiple Occupation) – HMO mortgages are available as a standalone mortgage product if you don’t have a portfolio of 4 or properties
Properties owned via a limited company.
Consent to let properties.
Holiday lets.
All buy to let mortgages owned either solely or jointly.

How does a portfolio landlord mortgage work?

A landlord mortgage, portfolio mortgage or buy-to-let mortgage works identically to a regular mortgage, that means:

It is interest-only.
Secured on rental properties.
On a one mortgage per property basis – not one mortgage for the entire portfolio.

This means that you will require a portfolio mortgage after you have acquired four properties and for every new property you acquire after the fourth.

What if you already have a buy-to-let mortgage?

If you have an existing buy-to-let mortgage, you have the option of remortgaging them onto a variety of portfolio products, however, this isn’t required unless your introductory period was due to end and didn’t want to be transferred to your lenders Standard Variable Rate (SVR).

The reality is that you can have from four to many additional properties with portfolio mortgages.

Recommended guides:

What differences are there for portfolio landlords?

When applying for a mortgage, you may need to provide extra information to your lender than you did before. This might include your current property portfolio and experience, as well as your assets and liabilities. Lenders may also want to see a business plan and cash flow statements for the properties you own.

Lenders will want to assess your personal income and expenditure including tax liability, living costs and essential expenses, as well as any other financial or credit commitments that you may have. In some cases, the process is now quite similar to a residential mortgage application.

It’s important to remember that lenders will also evaluate your rental income, especially if it is used as part of your personal income. Rental income is usually validated by comparing typical rents in the area, as well as local demand. Future rental income will be checked, too.

What is an Interest Coverage Ratio (ICR)?

Lenders work out ICR as a ratio of your expected monthly rental income from a buy to let property to the monthly interest payments, taking into account any likely future increases in interest rates.

This ratio is used to assess the debt you intend to take on. Lenders want to work out how easily you’ll be able to pay it back using the rental income from your new property alone. If it won’t bring in enough income, your lender won’t grant you a buy to let portfolio mortgage on rental income alone.

However, it is also possible to apply to use your personal income, as well as your potential rental income when taking out a new buy to let mortgage. This will be considered in circumstances where there is a shortfall in the required rental income received from your buy to let property to meet the minimum ICR rate.

Check Today's Best Rates >

Portfolio mortgages frequently asked questions

What’s the difference between a professional landlord and a portfolio landlord?

Typically, an individual that has a full time job or earns the majority of their income outside of their rental properties are referred to as “amateur landlords”.

Landlords that have four or more properties and generate the majority of their income via their buy-to-let properties are referred to as “professional landlords” and often have a portfolio mortgage product.

What is the best mortgage for a landlord?

If you are landlord with up to 3 properties then you’ll need regular buy-to-let mortgages, often these are acquired via a limited company since there are certain tax advantages.
If you own more than 4 buy-to-let properties then you will need a portfolio mortgage when you purchase any further properties and/or when you remortgage your existing ones.
At the point your borrowing exceeds the limits determined by your lender, then you will have to consider a commercial mortgage.

How many landlord mortgages can you have at the same time?

In theory, it’s possible to have between four to almost any number of portfolio mortgages beyond that. Of course, lenders will set their own requirements with regards to lending limits and how many mortgages you can hold with them. If you do exceed these borrowing limits and you want to acquire further but-to-let mortgages, it’s usually advised that you look into commercial mortgages.

If you are considering a commercial mortgage, then you may want to think about remortgaging all of your current buy-to-let/portfolio mortgages onto a single commercial mortgage.

Related reading?

Got a few questions about buy to let portfolio mortgages?

The new rules around buy to let mortgages can be difficult to get your head around at first, but you’ll feel much more confident once you’re in the know.

Planning on applying for a new buy to let mortgage in the near future? Talk to us if you’d like to know what you need to have in place.

If you have any questions about but to let portfolio mortgages, Call us today on 01925 906210. One of our advisors can talk through all of your options with you.