Buy-to-Let Mortgages – Expert Advice for Landlords
Looking to Invest in Property? Get Professional Buy-to-Let Mortgage Advice
Investing in property can be an effective way to build wealth, generate rental income, and expand a property portfolio. However, securing the right buy-to-let mortgage is essential to ensure long-term success.
Whether you are a first-time landlord or an experienced investor, having access to the best mortgage deals and structuring your investment in the most tax-efficient way can make a significant difference to your financial returns.
At Mather & Murray Financial, our independent mortgage advisers specialise in helping landlords find the best mortgage options, structure their investments efficiently, and grow their property portfolios with confidence.
What is a Buy-to-Let Mortgage?
A buy-to-let mortgage is a loan designed for purchasing property that will be rented out to tenants. Unlike residential mortgages, where affordability is based on personal income, buy-to-let mortgages are primarily assessed on the rental income the property can generate.
Most lenders require:
- A minimum deposit of 20 to 25 percent, although higher deposits can secure better rates.
- Rental income to be at least 125 to 145 percent of the monthly mortgage payment.
- A strong credit history and proof of financial stability.
Since mortgage interest rates and lender requirements change frequently, professional mortgage advice is crucial to securing the best deal.
Why Consider a Buy-to-Let Mortgage?
Buy-to-let mortgages provide a range of benefits, including:
- Generating a passive rental income
- Potential capital growth as property values increase over time
- Tax benefits, such as offsetting certain expenses against rental income
- The ability to build a property portfolio and expand investment opportunities
However, buy-to-let mortgages typically come with higher interest rates and deposit requirements than residential mortgages, so structuring your investment correctly is essential.
Buying a Buy-to-Let Property: Individual vs. Limited Company (SPV)
One of the biggest decisions landlords face is whether to buy property in their personal name or through a Special Purpose Vehicle (SPV)—a limited company specifically created for property investment.
Buying as an Individual
Pros:
- The mortgage application process is generally simpler
- No additional costs for setting up and running a company
- Lower interest rates compared to SPV buy-to-let mortgages
Cons:
- Mortgage interest relief is restricted to basic rate relief at 20 percent
- Higher personal tax on rental income
- Properties owned personally form part of the individual’s estate for inheritance tax
Buying Through a Limited Company (SPV)
Pros:
- Full tax relief on mortgage interest, reducing taxable profits
- Corporation tax on profits is lower than higher-rate income tax
- Easier inheritance planning, as company shares can be transferred more efficiently than properties
Cons:
- Higher mortgage interest rates compared to personal buy-to-let mortgages
- Additional administrative work and costs associated with running a company
- Withdrawing profits from the company is subject to tax, requiring careful financial planning
The right approach depends on your investment strategy, tax situation, and long-term goals. Our expert mortgage advisers can help you decide which structure best suits your needs.
Types of Buy-to-Let Mortgages
There are different types of buy-to-let mortgages, depending on your investment goals.
1. Standard Buy-to-Let Mortgages
- Suitable for most landlords renting out a single property
- Typically interest-only, meaning lower monthly payments
2. HMO (House in Multiple Occupation) Mortgages
- Designed for properties rented to multiple tenants, such as student housing
- Can offer higher rental yields but have stricter lending criteria
3. Limited Company Buy-to-Let Mortgages
- For landlords purchasing property through a company (SPV)
- Typically requires a larger deposit and higher interest rates
4. Holiday Let Mortgages
- Designed for short-term rental properties, such as those listed on Airbnb
- Rental income assessment differs from standard buy-to-let mortgages
5. Refurbishment Buy-to-Let Mortgages
- Suitable for landlords looking to renovate and rent out properties
- Often involves short-term bridging finance followed by a long-term mortgage
How Much Can You Borrow on a Buy-to-Let Mortgage?
Lenders assess affordability based on the rental income your property can generate.
A common requirement is that rental income must be at least 125 to 145 percent of the mortgage repayment. Some lenders may also consider an applicant’s personal income when assessing affordability.
Our advisers will guide you through the lending criteria and help you maximise your borrowing potential.
Step-by-Step Buy-to-Let Mortgage Process
Step 1: Free Consultation
We assess your:
- Investment goals and financial position
- Preferred mortgage structure (personal or SPV)
- Expected rental income and deposit
Step 2: Finding the Best Mortgage Deal
We compare mortgage products from the entire market, securing the most competitive interest rates and terms.
Step 3: Mortgage Application & Approval
We manage the application process, liaising with lenders, solicitors, and surveyors to ensure everything runs smoothly.
Step 4: Mortgage Completion & Property Rental
Once your mortgage is approved, you can complete your purchase and start generating rental income.
Why Choose Mather & Murray Financial?
- Independent Mortgage Advisers – We search the whole market to find the best deals
- Specialist Buy-to-Let Expertise – Helping landlords secure competitive mortgage rates
- Tailored Tax Guidance – Advising on personal vs. company ownership
- Support for Portfolio Landlords – Whether you own one property or multiple, we offer long-term mortgage strategies
- Local & Nationwide Service – Book a consultation at our Swindon head office, at your home or speak with an adviser online
Frequently Asked Questions About Buy-to-Let Mortgages
1. Can I get a buy-to-let mortgage with a low deposit?
Most lenders require at least 20 to 25 percent deposit, though specialist lenders may offer lower deposit options.
2. Do I pay tax on rental income?
Yes, rental income is subject to Income Tax (for individuals) or Corporation Tax (for SPVs).
3. How long does the buy-to-let mortgage process take?
Typically, the process takes four to eight weeks, depending on lender requirements and legal formalities.
4. Can I live in a buy-to-let property?
No, buy-to-let mortgages are designed specifically for rental properties.
Speak to a Buy-to-Let Mortgage Specialist Today
Whether you are a new landlord or expanding your property portfolio, securing the right mortgage is essential to your success.
At Mather & Murray Financial, we provide independent, expert buy-to-let mortgage advice tailored to your investment strategy.
Book a free consultation today and start building your property portfolio with confidence.
Some types of buy to let mortgages are not regulated by the Financial Conduct Authority.
