Home / Glossary / Buy-to-let mortgage
What is Buy-to-let mortgage?
A buy-to-let mortgage is a loan to buy property that you will let to tenants. Lenders assess it mainly on the expected rent, not just your personal income.
Why it matters to landlords
Many are interest only, so the loan is repaid at the end, often from a sale. Lenders check the rent covers the interest by a margin, called the interest coverage ratio.
Mortgage interest is a finance cost: individuals get a basic rate tax reduction rather than a deduction under Section 24, while companies can deduct it.
Lenders also look at your experience, the property type and, for portfolio landlords with four or more mortgaged properties, the whole portfolio.