Can a First Time Buyer get a Buy to Let mortgage? 

Although many Mortgage Lenders prefer that Buy to Let mortgage applicants are already homeowners, it is possible to purchase a Buy to Let property as a First Time Buyer. As you will be seen as a higher risk borrower, however, you may find that your choice of lenders is somewhat reduced and that the interest rates attached to the mortgage deals available to you will be higher.

If you are considering a Buy to Let property as your first property, it’s a good idea to reach out to Mortgage Brokers like ourselves, as we have access to a broad spectrum of lenders, which will include those willing to Buy to Let mortgage applications from First Time Buyers. You may be able to balance some of the lender’s perceived risk by offering a larger deposit or showing prior experience as a landlord.

What’s the criteria for a Buy to Let mortgage?

Each lender will have their own specific criteria, although there are some broad criteria you are likely to need to match in order to qualify for a Buy to Let mortgage:

  • Those with stronger credit scores have more chance of acceptance
  • Usually there will be a maximum age threshold of around seventy
  • Some lenders have a minimum income threshold of around £25,000
  • Many (but not all) lenders will prefer you to be a homeowner
  • Some lenders will prefer that you have prior landlord experience
  • First time landlords may need additional credentials, such as a reference from your landlord

How will a Mortgage Lender assess my application?

Your application will be assessed based on the income potential of your Buy to Let property, although it’s also likely that you will need to undergo a financial stress test, to ensure that you are able to manage the repayments on your mortgage, when the property is not generating an income.

It’s important to research the potential rental yield (income) for similar properties in the area you plan to buy, as the majority of Mortgage Lenders will be looking for you to earn 125-145% of the mortgage repayments through rental income.

How is my income used to calculate my affordability?

It’s possible to find lenders who don’t have a personal income requirement, and will base the affordability assessment purely on the rental potential, however, to achieve more competitive mortgage rates, it can be beneficial to use a lender who will consider your income alongside this. 

For Buy to Let applicants, your income will usually only be used to ensure you can afford the monthly mortgage payments, however, if you’re purchasing an investment property as a First Time Buyer, it’s possible that lenders will use a multiple of your personal income to determine a maximum lending cap.

How much deposit will I need to put down?

Although it’s possible to find Buy to Let mortgages with a minimum deposit requirement as low as 15%, this is unlikely to be the case for a First Time Buyer. The more typical 25% minimum deposit is likely to be required to secure a mortgage.

Can I get a Buy to Let mortgage and live in the property myself?

Buy to Let mortgages are used solely for the purchase of rental property, and you will not be permitted to live in the property yourself whilst you have this type of mortgage in place. 

Is it illegal to rent a house without a Buy to Let mortgage?

If you own your home outright, you may rent it out as you wish, however, if there is a residential mortgage on the property, you would almost certainly be breaching the terms and conditions of your mortgage contract, if you offered it to let.

There are certain circumstances where it may be illegal to offer the property for rent, as it could amount to fraud, it’s important to check with your lender.

How can The Mortgage Brokerage help you?

It’s not always easy to secure a Buy to Let mortgage as a First Time Buyer, however, at The Mortgage Brokerage, we’re able to access those lenders who will be able to help you. There is so much to consider when you choose to become a landlord for the first time, but as brokers who specialise in Buy to Let, we can help you maximise your potential and achieve a profitable investment.

Your property may be repossessed if you do not keep up with your mortgage repayments. The Financial Conduct Authority does not regulate some Buy to Let Mortgages.

Why Choose Us?