What is a Buy-to-let Mortgage?

This is the first in a series of buy-to-let mortgage guides which are designed to provide a good baseline level of knowledge on buy-to-let mortgages and support the effective use of our specialised buy-to-let mortgage calculators.

Each buy-to-let mortgage guide provides a bite-sized amount or relevant information with links to associated buy-to-let guides and more detailed information where necessary. Simple read the guide and click the next or previous buttons for a step-by-step guide to buy-to-let mortgages. Let's start by looking at what a buy-to-let mortgage is.

What is a buy-to-let mortgage?

A buy-to-let mortgage is a mortgage produce specifically designed for properties which are purchased in order to be rented out to generate an income. When you complete the process of buying a property and renting it out, you become classed as a landlord. Buy-to-let mortgages became increasingly popular from 1999 as individuals viewed the property market as a low risk investment due to the rapidly rising house prices fuelled by the increased demand generated by the drive for people to own their own homes.

Buy-to-let mortgages are typically provided at a higher interest rate that personal home mortgages and require higher deposits. Buy-to-let mortgage lending is calculated differently to normal home buying mortgages with mortgage lenders looking at other factors including the rental income versus monthly repayment, we cover this in detail later in the buy-to-let mortgage guide.

Next: How do buy to let mortgages work?

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