Buy-to-let mortgages 

Looking to earn extra income with a buy-to-let? Perhaps you're looking for a better deal on your existing rental property? Whatever your needs, we’re here to help.  

At Saga Mortgages, we work with Tembo, who has been voted the UK’s Best Mortgage Broker for the last 4 years, to make buy-to-let mortgages easy. Get expert advice from our friendly team and the best deals from across the market. Don't forget – a mortgage is a loan secured against your property. You may lose it if you don't repay each month.

What is a buy-to-let mortgage?

A buy-to-let mortgage is designed for people who want to invest in property and rent it out to tenants. It’s typically used when you don’t own the property outright and need a mortgage to make the purchase.

These mortgages are usually interest-only, meaning you only cover the interest on your monthly payments before repaying the full amount borrowed at the end of the term. Landlords commonly use them, but they're also an option if you’re planning to rent to family members or want to move home while keeping your current property.

What are the criteria for a buy-to-let mortgage?

• Age:  This can vary depending on the lender, but some limit the term to a maximum age, often between 70 and 75.
• Credit history: Lenders will check your credit history to see if you’re reliable or a risk.
• Deposit: A minimum deposit of 25% is typically required.
• Income: Most lenders require some form of income (enough to cover monthly repayments plus other landlord responsibilities). If you’re unsure about this, you can talk to our team of experts.  

Benefits and risks of a buy-to-let mortgage

There are both benefits and risks associated with buy-to-let mortgages. Let's take a look at both.

Types of buy-to-let mortgages

There are several types of buy-to-let mortgages available. Let’s break down the options.

Standard buy-to-let

You buy a flat or house and rent it out to tenants. It’s normally interest-only, but you can find some repayment options. 

Family buy-to-let

You rent out a flat or house to a family member. You can also live with them at the same time, which isn’t possible with a standard buy-to-let. 

Let-to-buy

This allows you to switch your current home’s mortgage to a buy-to-let, so you can rent the property to tenants while you buy a new home. It might be a good option if: 

• You’re a first-time landlord. 
• You have inherited a property. 
• You want to move without selling your current home.

Top slicing

Affordability for a buy-to-let mortgage is typically worked out using the rental yield. If that's not enough, you could consider top slicing, which uses the rental yield and your personal income.  

How do you apply for a buy-to-let mortgage?

There are a few steps to follow when applying for a buy-to-let mortgage in the UK:

1. Check your eligibility: The first step is to ensure you’re eligible for a buy-to-let mortgage. You can register here to check your eligibility.
2. Assess your options: Once you know whether you’re eligible, we’ll invite you for a chat with no obligation to proceed. Your personal advisor will show you mortgage options from over 80 lenders.
3. Get an agreement in principle: If you choose a deal, we’ll then verify your income, outgoings, identity and credit history. Then, you can get an agreement in principle (AIP).
4. Begin your property search: As soon as you’ve got an AIP, you can start looking for a property.
5. Apply for a buy-to-let mortgage: Once you’ve found a property and had an offer accepted, you can begin your application for a full buy-to-let mortgage.

Obtaining a buy-to-let mortgage can be more challenging than securing other types of mortgages. Some of the reasons include: 

• Minimum deposits can be higher than they are with home mortgages.  
• Interest rates are often higher, raising the cost of monthly repayments. 
• Lenders might be less confident if you don’t have a home of your own.

How much could I borrow?

To calculate your affordability, lenders use your current or future rental yield. The monthly rent must be 25% more than your repayments, which shows you can cover the costs.  

Deposits tend to be larger for buy-to-let mortgages than for home mortgages. A lender will typically want you to put down 25% to 40%. Lenders will also consider factors such as your credit score. 

Worried you can’t borrow enough? You could look at top slicing, which uses your income to boost affordability. 

How many buy-to-let mortgages can I have?

There’s no official limit on how many buy-to-let mortgages you can have. However, at Saga, we work with multiple lenders, each with their own rules and portfolio limits. So, it’s worth checking your lender’s terms and conditions when applying for a buy-to-let mortgage.

Can you remortgage a buy-to-let mortgage?

You can remortgage a buy-to-let property, and it’s something many landlords look to do for several reasons, including:

• Securing better interest rates.
• Releasing equity for other investments.
• Changing to a different mortgage product.

How much can you borrow? 

To work out affordability, lenders use your current or future rental yield. The monthly rent must be 25% more than your repayments. This shows you can cover the costs.  Deposits tend to be larger than with home mortgages. A lender will typically want you to put down 25 to 40%. Lenders will also look at things like your credit score. 

Worried you can’t borrow enough? You could look at top slicing, which uses your income to boost affordability. 

Is it difficult to get a Buy-to-Let mortgage? 

It can be harder to get a Buy-to-Let mortgage. Some of the reasons include: 

• Minimum deposits can be higher than they are with home mortgages.  
• Interest rates are often higher. This raises the cost of monthly repayments. 
• Lenders might be less confident if you don’t have a home of your own. 

Do you need an income? 

Most lenders will want you to have some form of income. If you’re unsure about this, you can talk to our team of experts.  

Can you rent to your family? 

Yes. You can rent to loved ones, but you will need a Family Buy-to-Let mortgage. This ensures everything is above board. 

How do you apply? 

Register here to see if you’re eligible. We’ll then invite you to a chat with no obligation to proceed. Your personal advisor will show you mortgage options from over 80 lenders. If you choose a deal, we’ll then verify your income, outgoings, identity and credit history. 

Why choose Saga Mortgages? 

We’re here to help over-50s in the property market. You can expect award-winning advice from a team of friendly mortgage experts. Available seven days a week, their goal is to find the best deal for you.  

What lenders will you get access to? 

Through Saga Mortgages, you can access over 20,000 products from over 80 lenders. This includes high-street lenders like Nationwide, Halifax, Lloyds, Barclays and HSBC. It also includes deals from specialist lenders like Livemore.