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Read the Mortgage and Property advice from Which? to help you find the best solution for your needs or use Money Compare to find the best mortgage for you.

Buy-to-let mortgages for first-time buyers

Can a first-time buyer get a buy-to-let mortgage?

The good news is yes, it is possible to get a buy-to-let mortgage when you’re a first-time landlord and a first-time buyer, but it’s not necessarily easy.

There are lots of factors to consider, and lenders can be more selective when it comes to lending to first-time buyers on a buy-to-let basis.

In this guide, we explain what first-time landlords need to consider, and what you need to get in place to make your application a success.

Expert, buy-to-let mortgage advice

Which? Mortgage Advisers have experience of offering buy-to-let advice to first-time buyers. We help work out what you really need, scour the market to find the best deals available and explain what your options are.

We take into account more than just rates, but look at which deals suit your personal circumstances and which lenders can meet your timescales.


Do you really need a buy-to-let mortgage?

Historically buy-to-let mortgages have been easier to come by than residential mortgages – and as they’re usually offered on an interest-only basis, borrowers enjoy lower monthly repayments.

Lenders want to ensure that borrowers are not taking a buy-to-let mortgage because it is easier to secure, and then live in the property.

If you are planning on living in the property you’re purchasing, you’ll need to get a residential mortgage.

What are the mortgage options for a first-time landlord?

Many lenders won’t lend to first-time buyers on a buy-to-let basis because they see this as a riskier option.

Because they view the mortgage as higher risk, they’ll often ask for more information from a first-time buyer than they would an experienced landlord. This could include a higher mortgage deposit or a higher ratio of rental income to mortgage payments.

The requirement of a higher deposit could mean that getting a buy-to-let mortgage on your own may be tougher, but there could be other options available to you.

For example, you may be able to purchase the property jointly with a parent or potentially take out a guarantor mortgage.

The options available depend on your circumstances and the deals lenders are offering at the time. Our experienced advisers can talk you through the options and make a mortgage recommendation tailored to your needs.

How big a deposit do first-time buy-to-let investors need?

You’ll need a minimum of a 25% deposit for most lenders. But that’s not the only costs involved.

Taking out a mortgage can incur arrangement fees, product fees, and valuation fees – these don’t apply to all mortgages but a qualified mortgage adviser will be able to explain all the fees attached to the products available to you.

Don’t make the mistake of assuming that the property will always be let – it’s important to have a backup plan for how you’ll pay the mortgage if you don’t have a tenant.

You’ll also need to keep track of the rental income you receive, and we recommend that you speak to an independent tax adviser about the taxes you’ll need to pay on any income related to your new property.

How much stamp duty will first-time buy-to-let investors pay?

If you’ve never owned a property before and want to buy a property to let out, you’ll miss out on the stamp duty discount residential first-time buyers currently enjoy.

If you’ve bought a property you’re going to live in for less than £300,000, you’ll pay no stamp duty. If it’s valued between £300,000 and £500,000, you’ll only pay 5% on the amount above £300,000.

First-time landlords don’t get this discount, but they don’t pay the extra 3% that buy-to-let investors who already own property do. You’ll pay stamp duty at the rates that existing homeowners pay.

Find out how much stamp duty you’ll pay using our stamp duty calculator.

Can first-time buy-to-let investors use Help to Buy?

The government-backed Help to Buy schemes are designed to help first-time buyers and existing residential homeowners purchase a property.

You can find out more in our Help to Buy mortgages guide.

These schemes, be they the Help to Buy Isa or the equity loan scheme, are not available for those who want to let out a property.

How does buy-to-let affect your chances of buying your own home?

If you want to buy a property of your own to live using a mortgage, but still keep your buy-to-let property, lenders will consider your entire financial position when you come to apply for a residential mortgage.

Lenders will take into account any debt you have outstanding on your buy-to-let mortgage, which could put you at a disadvantage. They may want to see evidence of the income you’re receiving for your buy-to-let property, usually in the form of tax returns showing your rental income.

This may not always be an issue, but it’s something you need to be aware of before you start on your journey, and a mortgage adviser can talk you through how this could impact you.

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