Compare our best buy to let mortgages

Buy to let mortgages are specifically designed for people looking to invest in a property and become a landlord, rather than live in the property. Typically, you’ll need a large deposit to secure a buy to let mortgage and the interest rates may be slightly higher than traditional mortgages. To find out more about buy to let mortgages, read our guide and use our calculator below to compare the best buy to let mortgages.

Property price

£

Mortgage amount

£

Mortgage term

years

Initial rate type

Deal length

Repayment type

Our best buy to let mortgage rates

  • The Mortgage Works 2 Year Fixed mortgage

    Initial rate 2.89%. APRC 5.4%. Set-up fees £3,200
  • Bath Building Society 2 Year Discount mortgage

    Initial rate 3.1%. APRC 4.8%. Set-up fees £1,400
  • Virgin Money 2 Year Fixed mortgage

    Initial rate 3.29%. APRC 4.5%. Set-up fees £995
  • Chorley Building Society 2 Year Discount mortgage

    Initial rate 3.34%. APRC 5.2%. Set-up fees £1,200
  • Chorley Building Society 2 Year Discount mortgage

    Initial rate 3.34%. APRC 5%. Set-up fees £50
  • Virgin Money 5 Year Fixed mortgage

    Initial rate 3.35%. APRC 4.3%. Set-up fees £995
  • We've found 36 mortgage deals

    The Mortgage Works

    2 Year Fixed

    Initial rate

    2.89%

    until 31-08-2023

    APRC

    5.4%

    overall cost for comparison

    Set-up fees

    £3,200

    Monthly payment

    £749.62

    for 24 months

    The Mortgage Works

    2 Year Fixed

    Initial rate

    2.89%

    until 31-08-2023

    APRC

    5.4%

    overall cost for comparison

    Set-up fees

    £3,200

    Monthly payment

    £749.62

    for 24 months

    Bath Building Society

    2 Year Discount

    Initial rate

    3.1%

    APRC

    4.8%

    overall cost for comparison

    Set-up fees

    £1,400

    Monthly payment

    £767.09

    for 24 months

    Virgin Money

    2 Year Fixed

    Initial rate

    3.29%

    until 01-10-2023

    APRC

    4.5%

    overall cost for comparison

    Set-up fees

    £995

    Monthly payment

    £783.09

    for 24 months

    Virgin Money

    2 Year Fixed

    Initial rate

    3.29%

    until 01-10-2023

    APRC

    4.5%

    overall cost for comparison

    Set-up fees

    £995

    Monthly payment

    £783.09

    for 24 months

    Virgin Money

    2 Year Fixed

    Initial rate

    3.29%

    until 01-10-2023

    APRC

    4.5%

    overall cost for comparison

    Set-up fees

    £995

    Monthly payment

    £783.09

    for 24 months

    Virgin Money

    2 Year Fixed

    Initial rate

    3.29%

    until 01-10-2023

    APRC

    4.5%

    overall cost for comparison

    Set-up fees

    £995

    Monthly payment

    £783.09

    for 24 months

    Chorley Building Society

    2 Year Discount

    Initial rate

    3.34%

    APRC

    5.2%

    overall cost for comparison

    Set-up fees

    £1,200

    Monthly payment

    £787.33

    for 24 months

    Chorley Building Society

    2 Year Discount

    Initial rate

    3.34%

    APRC

    5%

    overall cost for comparison

    Set-up fees

    £50

    Monthly payment

    £787.33

    for 24 months

    Virgin Money

    5 Year Fixed

    Initial rate

    3.35%

    until 01-10-2026

    APRC

    4.3%

    overall cost for comparison

    Set-up fees

    £995

    Monthly payment

    £788.18

    for 60 months

    Not ready to get a mortgage?

    Learn more about how to get a mortgage

    Show simple deals list

    Representative example:

    If you borrowed £200,000 payable over 25 years, with an initial fixed-rate for two years at 4.79%, your monthly payments would be £1,144.84 for 24 months. This would then revert to a standard variable rate (SVR) of 4.24% for the remaining 23 years, costing £1,086.24 per month for 276 months. Overall cost for comparison is 4.5% APRC representative. The total amount payable over the full term would be £328,272, including product fee of £995 and interest of £127,277.

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    What is a buy to let mortgage?

    A buy to let (BTL) mortgage allows you to buy a property and rent it out. By doing this, you become a landlord. You cannot live in a property that you buy using a buy to let mortgage.

    Buy to let mortgages are similar to standard residential mortgages but can be much harder to get.

    You can increase your return on a buy to let investment by improving the property – giving you a bit more control than you have over how much you earn from stock market investments, which are dictated by market performance, or savings accounts where the interest rate can change.

    Most buy to let mortgages are interest only. To secure an interest only mortgage, you need a way to pay off the initial amount borrowed, known as the principal, at the end of the mortgage term. This is called a repayment plan.

    With non interest-only buy to let mortgages, investment accounts are the most common form of repayment plan. But for buy to let landlords, the easiest way to repay the principal is to sell the property at the end of the mortgage term - as long as house prices have not gone down, of course.

    Who can take out a rental mortgage?

    You may need to be over a minimum age to get a buy to let mortgage. Most lenders will limit you to say 3 or 4 buy to let mortgages, or a maximum debt of £3 million, through them at any one time, although this doesn't necessarily mean you cannot take out more buy to let mortgages with another lender, though. The criteria for a buy to let mortgage depends on your individual circumstances.

    Buy to Let: Pros and Cons

    One big advantage of BTL is that you can earn in two different ways: rental income and property value increases. However, how much money you can make as a buy to let landlord depends to a large extent on the property - and rental - market.

    Currently, in 2020, there is a lot of uncertainty surrounding property prices and the economy in general – stock markets are extremely volatile and with the Bank of England dropping the base rate to just 0.10% in response to Covid-19, you will earn next to nothing in most savings accounts.

    Given that mortgage rates are also low, investing in property via buy to let may currently seem an attractive option - especially if you use our buy to let mortgage comparison tables to find the best deal. But recent changes to buy to let property tax rules have made it harder to make a profit, because you have to pay more stamp duty and can no longer claim tax relief on your mortgage interest payments.

    Buy to Let Mortgages: FAQs

    Before you decide to take out a buy to let mortgage to invest in a property, it’s worthwhile considering the risks you’ll be exposed to. Make sure you could afford mortgage repayments if:

    • Interest rates go up
    • You cannot find a tenant and so have no rental income
    • The value of the property goes down

    What is the maximum buy to let LTV?

    Generally speaking, a buy to let mortgage lender will require a deposit of at least 25% (75% LTV) to 40% (60% LTV). Buy to let mortgage rates are also generally higher than the interest rates on standard home loans.

    What is buy to let yield?

    When you’re negotiating a mortgage, the lender will ask about your expected rental yield.

    Rental yield is the annual rent received as a percentage of the property purchase price. For a property costing £240,000, an annual rent of £12,000 would mean a yield of 5%.

    Try to aim for an 8% rental yield to ensure there's enough cash flow to cover expenses, maintenance costs and problems.

    In the case of a BTL property, the rental yield is a measurement of how much cash it generates each year as a percentage of the asset’s value.

    The gross yield is the return before expenses, whereas the net yield is the return after costs. The net yield provides a truer picture of profit for a BTL investor or landlord.

    Can I get a buy to let fixed rate mortgage?

    Buy to let mortgages are available in all the usual flavours: fixed rate, tracker, and variable.

    If interest rates rise and you are on a variable rate mortgage, your monthly repayments could go up. This does not necessarily mean you could just increase the rent to cover the difference.

    Your payments will stay the same on a fixed rate buy to let mortgage, but could increase when the deal ends. So either way you need to ask yourself: can you afford higher interest rates?

    What happens to a buy to let mortgage if I have no income?

    Factor into your budget your property being empty for two months a year as insurance. You should also budget for repairs, new furniture, and maintenance. And try to set aside enough to cover unexpected problems, such as flooding or roof repairs.

    You should also be prepared for rogue tenants who damage the property or leave owing money. They’re rare, but they do exist. You can reduce the risk by using the Tenancy Deposit Scheme and by taking out landlord insurance or rent guarantee insurance.