BUY-TO-LET LENDING CRITERIA

Buy-to-Let lending differs from normal residential mortgages. On the whole the lender will require a bigger deposit to reduce the risk they are exposed to and or charge a higher interest rate than normal. Remember rental income is not guaranteed so the lender wants the extra security of a lower loan to value. (LTV)

As a rule of thumb lenders will want the rental income to equate to 125 or 130% of the mortgage monthly payment. E.g. £68,000 loan, property value £80,000, interest rate 6.5%. In this case rental income would need to be £482.25 per month, which would be 130% of the mortgage payment of £370.96.