What is a Buy-to-Let Mortgage?

A buy-to-let (BTL) mortgage is a loan specifically designed for purchasing property to rent out to tenants. Unlike residential mortgages (where you live in the property), BTL mortgages are assessed based on the rental income the property will generate, not just your personal income.

Key Differences Between BTL and Residential Mortgages

Residential Mortgage:

• Based on your personal income and affordability
• Lower interest rates (typically 4-6%)
• Lower deposit required (5-10% for first-time buyers, 10-25% for movers)
• You live in the property

Buy-to-Let Mortgage:

• Based on rental income (typically 125-145% of mortgage payment)
• Higher interest rates (typically 4.5-8%)
• Higher deposit required (typically 25%, but can be 15-20% for strong applicants)
• You rent the property to tenants

Key Features of Buy-to-Let Mortgages

Loan amounts: £25,000 to £5 million+ (larger portfolios available)

Loan-to-Value (LTV): Typically 75% (25% deposit), up to 85% for strong applicants or lower-risk properties

Interest rates: 4.5-8% depending on LTV, property type, and borrower profile

Rental coverage: Lenders require rental income to be 125-145% of the mortgage payment (stress-tested at a higher rate, typically 5.5%)

Terms: 2-year, 3-year, 5-year fixed rates, or variable/tracker rates

Repayment: Interest-only (most common for BTL) or capital repayment

Borrowing structures: Personal name or Limited Company SPV

Our broker fee: 1% of loan amount (e.g., £2,000 on a £200,000 mortgage), payable on completion

Who Can Get a Buy-to-Let Mortgage?

Buy-to-let mortgages are available to:

First-time landlords – You don’t need previous landlord experience, but most lenders require you to be an existing homeowner (either own outright or have a residential mortgage)

Experienced landlords – Adding to your portfolio or remortgaging existing BTL properties

Portfolio landlords – Owning 4+ mortgaged BTL properties (specialist underwriting applies)

Limited company buyers – Purchasing through an SPV for tax efficiency

Expats and foreign nationals – Some lenders accept non-UK residents (restrictions apply)

Older borrowers – Many lenders accept applicants up to age 75-85 at the end of the mortgage term

Eligibility Criteria

Most BTL lenders require:

Personal Circumstances

• Minimum age: 21 (some lenders require 25)
• Maximum age: 75-85 at the end of the mortgage term
• UK residency (or expat with UK ties)
• Existing homeowner (most lenders require you to own your own home)
• Minimum personal income: £25,000-£30,000 per annum (some lenders have no minimum)

Property Requirements

• Minimum property value: £40,000-£50,000 (although many lenders require a minimum property value of at least £75,000)
• Maximum property value: No upper limit for standard BTL (specialist lenders for high-value properties)
• Property type: Houses, flats, maisonettes (standard construction, not ex-local authority in some cases)
• Tenancy type: Assured Shorthold Tenancy (AST) to private tenants

Rental Coverage

• Rental income must be 125-145% of the mortgage payment(stress-tested at 5.5% interest rate)
• Example: If your monthly mortgage payment is £800, rental income must be at least £1,000-£1,160 per month

Credit History

• Clean credit preferred (no CCJs, defaults, bankruptcies in the last 3-6 years)
• Some adverse credit accepted by specialist lenders (higher rates apply)

Types of Buy-to-Let Mortgages

Standard Buy-to-Let

• Single property let to one household or family
• Standard AST tenancy agreement
• Most competitive rates (4.5-6.5%)

Portfolio Landlord BTL

• You own 4+ mortgaged BTL properties
• Specialist underwriting (lenders assess your entire portfolio)
• Slightly higher rates or lower LTVs

Limited Company BTL

• Property owned by a Special Purpose Vehicle (SPV)
• Tax advantages (corporation tax at 19-25% vs. income tax at 20-45%)
• Slightly higher rates than personal BTL (typically +0.5-1%)

Expat/Foreign National BTL

• Available to non-UK residents
• Higher deposits (typically 30-40%)
• Limited lender panel

Houses in Multiple Occupation (HMO)

• Property let to 3+ unrelated tenants (separate rooms, shared facilities)
• Requires HMO license (if applicable)
• Covered in detail on our Specialist BTL page

Multi-Unit Freehold Blocks (MUFB)

• Freehold building with 4+ self-contained flats
• Specialist product (not all lenders offer this)
• Covered in detail on our Specialist BTL page

Holiday Lets/Short-Term Lets

• Properties let on short-term basis (Airbnb, Booking.com, etc.)
• Assessed on projected income, not AST rental
• Covered in detail on our Specialist BTL page

Real-World Example: Standard Buy-to-Let Purchase

The Property

• Type:2-bedroom flat in Glasgow
• Purchase price:£150,000
• Deposit (25%):£37,500
• Loan amount:£112,500
• Monthly rent:£850

Rental Coverage Calculation

• Mortgage payment (interest-only at 5.5% stress test):£515 per month
• Required rental income (at 125%):£644 per month
• Actual rental income:£850 per month
• Result:✅ Passes rental coverage (£850 > £644)

Cost Breakdown

• Deposit:£37,500
• Broker fee (1%):£1,125 (payable on completion)
• Lender arrangement fee:£999 (can be added to loan)
• Valuation fee:£300-£500
• Legal fees:£800-£1,500
• LBTT(BTL rates + ADS): £9,100
• Total upfront cost:~£50,500

Monthly Costs (Interest-Only Mortgage at 5.5%)

• Mortgage payment:£515
• Landlord insurance:£25
• Maintenance reserve:£50
• Total monthly cost:£590

Monthly Profit

• Rental income:£850
• Monthly costs:£590
• Net monthly profit:£260 (before tax)

Annual Return

• Annual rental income:£10,200
• Annual costs:£7,080
• Net annual profit:£3,120
• Cash-on-cash return:2% on £49,500 deposit (before tax)

Stamp Duty & Tax Considerations for Buy-to-Let Properties

One of the biggest upfront costs when purchasing a buy-to-let property is property transaction tax. The tax you pay depends on where the property is located:

• Scotland:Land and Buildings Transaction Tax (LBTT) + Additional Dwelling Supplement (ADS)
• England & Wales:Stamp Duty Land Tax (SDLT) + 3% surcharge

As a Scottish broker based in Dundee, most of my clients purchase properties in Scotland, so understanding LBTT and ADS is crucial to calculating your true investment costs.

Land and Buildings Transaction Tax (LBTT) in Scotland

LBTT is Scotland’s property transaction tax, introduced in 2015 to replace Stamp Duty Land Tax. It’s calculated on a tiered basis (like income tax), meaning you only pay the higher rate on the portion of the price that falls within each band.

LBTT Rates for Residential Property (2025)

Property Price Band	LBTT Rate
Up to £145,000	0%
£145,001 – £250,000	2%
£250,001 – £325,000	5%
£325,001 – £750,000	10%
Over £750,000	12%

How LBTT is Calculated (Tiered System)

Unlike a flat-rate tax, LBTT is charged only on the portion of the price within each band.

Example 1: £200,000 property

• First £145,000: £0 (0%)
• Next £55,000 (£145,001 – £200,000): £1,100 (2%)
• Total LBTT:£1,100

Example 2: £300,000 property

• First £145,000: £0 (0%)
• Next £105,000 (£145,001 – £250,000): £2,100 (2%)
• Next £50,000 (£250,001 – £300,000): £2,500 (5%)
• Total LBTT:£4,600

Example 3: £500,000 property

• First £145,000: £0 (0%)
• Next £105,000: £2,100 (2%)
• Next £75,000: £3,750 (5%)
• Next £175,000 (£325,001 – £500,000): £17,500 (10%)
• Total LBTT:£23,350

Additional Dwelling Supplement (ADS) – Scotland’s BTL Surcharge

If you’re purchasing a buy-to-let property or second home in Scotland, you must pay an Additional Dwelling Supplement (ADS) of 6% on top of the standard LBTT rates.

When Does ADS Apply?

ADS applies if:

✅ You already own a residential property (anywhere in the world)

✅ You’re purchasing a buy-to-let property

✅ You’re purchasing a second home or holiday home

✅ The property is worth £40,000 or more

ADS does NOT apply if:

❌ You’re a first-time buyer purchasing your main residence

❌ You’re replacing your main residence (selling your old home within 18 months)

❌ The property is worth less than £40,000

❌ You’re purchasing a caravan, mobile home, or houseboat

How ADS is Calculated

ADS is a flat 6% of the total purchase price, not tiered like LBTT.

Example:

• Property price: £150,000
• ADS: 6% of £150,000 = £9,000

This is in addition to the standard LBTT, so you pay both.

Real-World LBTT + ADS Examples for Scottish BTL Properties

Example 1: £150,000 BTL Flat in Glasgow

Buyer: Existing homeowner purchasing a buy-to-let property

Standard LBTT Calculation:

• First £145,000: £0 (0%)
• Next £5,000: £100 (2%)
• Total LBTT:£100

Additional Dwelling Supplement (ADS):

• 6% of £150,000 = £9,000

Total Tax Due:

• LBTT: £100
• ADS: £9,000
• Total: £9,100

Total Upfront Costs:

• Deposit (25%): £37,500
• LBTT + ADS: £9,100
• Broker fee (1%): £1,125
• Lender arrangement fee: £999
• Valuation: £400
• Legal fees: £1,000
• Total upfront cost: £50,499

Example 2: £250,000 BTL House in Edinburgh

Buyer: Portfolio landlord purchasing 3rd BTL property

Standard LBTT Calculation:

• First £145,000: £0 (0%)
• Next £105,000 (£145,001 – £250,000): £2,100 (2%)
• Total LBTT:£2,100

Additional Dwelling Supplement (ADS):

• 6% of £250,000 = £15,000

Total Tax Due:

• LBTT: £2,100
• ADS: £15,000
• Total: £17,100

Total Upfront Costs:

• Deposit (25%): £62,500
• LBTT + ADS: £17,100
• Broker fee (1%): £2,500
• Lender arrangement fee: £999
• Valuation: £500
• Legal fees: £1,200
• Total upfront cost: £84,799

Example 3: £400,000 BTL Property in Aberdeen

Buyer: Limited company purchasing BTL property

Standard LBTT Calculation:

• First £145,000: £0 (0%)
• Next £105,000: £2,100 (2%)
• Next £75,000 (£250,001 – £325,000): £3,750 (5%)
• Next £75,000 (£325,001 – £400,000): £7,500 (10%)
• Total LBTT:£13,350

Additional Dwelling Supplement (ADS):

• 6% of £400,000 = £24,000

Total Tax Due:

• LBTT: £13,350
• ADS: £24,000
• Total: £37,350

Total Upfront Costs:

• Deposit (25%): £100,000
• LBTT + ADS: £37,350
• Broker fee (1%): £4,000
• Lender arrangement fee: £1,500
• Valuation: £600
• Legal fees: £1,500
• Total upfront cost: £144,950

Can I Reclaim the 6% ADS?

Yes, in limited circumstances. You can reclaim the Additional Dwelling Supplement if you’re replacing your main residence.

Scenario 1: Buying a New Main Home (Not BTL)

Situation:

• You own a main residence worth £200,000
• You buy a new main residence worth £250,000
• You plan to sell your old home

ADS Treatment:

• You pay the 6% ADS upfront (£15,000 on £250,000)
• If you sell your old home within 18 months, you can reclaim the ADS
• You must apply to Revenue Scotland for a refund within 12 months of selling

Timeline:

1. Purchase new home: Pay LBTT + ADS
2. Sell old home within 18 months
3. Apply for ADS refund within 12 months of sale
4. Revenue Scotland refunds the 6% ADS

Scenario 2: You CANNOT Reclaim ADS

ADS is NOT refundable if:

❌ You’re purchasing a buy-to-let property (even if you sell your main home)

❌ You keep your old property as a rental

❌ You miss the 18-month deadline to sell your old home

❌ You’re purchasing a second home or holiday let

Example:

• You own your main home
• You buy a BTL property for £150,000
• You pay £9,000 ADS
• You cannot reclaim this, even if you later sell your main home

LBTT vs. SDLT: Scotland vs. England/Wales Comparison

If you’re purchasing properties in both Scotland and England/Wales, it’s important to understand the differences:

Tax Rates Comparison

Purchase Price	Scotland (LBTT + ADS)	England/Wales (SDLT + 3% Surcharge)
£150,000	£9,100	£7,500
£200,000	£10,300	£11,500
£250,000	£17,100	£15,000
£300,000	£19,600	£19,500
£400,000	£37,350	£32,000
£500,000	£53,350	£47,500

Key Differences

Scotland (LBTT + ADS):

• Lower standard LBTT rates (especially for properties under £325,000)
• Higher surcharge:6% ADS for additional properties
• First-time buyer relief: Up to £175,000 (no LBTT on first £175,000 for first-time buyers purchasing main residence)

England & Wales (SDLT):

• Higher standard SDLT rates (3% on £250,001+)
• Lower surcharge:3% for additional properties
• First-time buyer relief: Up to £425,000 (no SDLT on first £425,000 for first-time buyers)

Which is Cheaper?

For lower-value BTL properties (under £200,000):

• England/Wales is cheaper (3% surcharge vs. Scotland’s 6%)

For mid-range BTL properties (£250,000 – £400,000):

• Scotland and England/Wales are roughly similar

For higher-value BTL properties (£500,000+):

• Scotland is more expensive due to the 6% ADS

How LBTT + ADS Affects Your BTL Investment Returns

The 6% ADS significantly increases your upfront costs for Scottish BTL purchases, which reduces your cash-on-cash return.

Example: £150,000 BTL Flat in Glasgow

Without ADS (hypothetical):

• Total upfront cost: £41,399
• Annual net profit: £3,120
• Cash-on-cash return: 5%

With 6% ADS (actual):

• Total upfront cost: £50,499
• Annual net profit: £3,120
• Cash-on-cash return: 2%

Impact: The 6% ADS reduces your return by 1.3 percentage points.

This is why it’s crucial to factor in LBTT + ADS when calculating whether a BTL investment makes financial sense.

Tax Planning Strategies for Scottish Landlords

Strategy 1: Consider Limited Company Ownership

• ADS still applies (6% on purchase price)
• But you can offset more costs against corporation tax (19-25%)
• Full mortgage interest relief (unlike personal landlords, who only get 20% tax credit)
• Better for higher-rate taxpayers (40-45%)

Strategy 2: Time Your Purchase Carefully

If you’re selling your main residence and buying a new one:

• Buy your new main home first, then sell your old home within 18 months
• This allows you to reclaim the 6% ADS on your new main home
• If you buy a BTL property before selling your old home, you pay 6% ADS and cannot reclaim it

Strategy 3: Factor ADS Into Your ROI Calculation

• Always include the full LBTT + ADS in your upfront cost calculation
• Compare the return to other investments (stocks, bonds, savings accounts)
• If the return is less than 5-6%, consider whether BTL is worth the risk and effort

Strategy 4: Use the Revenue Scotland LBTT Calculator

Before making an offer on a property, use the official calculator to work out your exact LBTT + ADS liability.

Strategy 5: Consult a Property Tax Accountant

• Scottish tax rules differ from England/Wales (LBTT, income tax bands, council tax)
• A specialist property accountant can help you structure your purchases tax-efficiently
• They can advise on personal vs. limited company ownership, timing of purchases, and claiming expenses

LBTT & ADS: Key Takeaways for Scottish Landlords

✅ LBTT is Scotland’s property transaction tax (tiered, like income tax)

✅ ADS is a flat 6% surcharge for buy-to-let and second homes

✅ ADS is higher than England’s 3% surcharge, so Scottish BTL purchases have higher upfront costs

✅ You cannot reclaim ADS on BTL properties (only on main residence replacements)

✅ Factor LBTT + ADS into your ROI calculation before making an offer

✅ Use the Revenue Scotland calculator to work out your exact tax liability

✅ Consider limited company ownership if you’re a higher-rate taxpayer

LBTT Resources

Revenue Scotland LBTT Calculator: https://www.revenue.scot/taxes/land-buildings-transaction-tax/tax-calculators

ADS Guidance: https://www.revenue.scot/taxes/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/lbtt-additional-dwelling-supplement

First-Time Buyer Relief: https://www.revenue.scot/taxes/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/lbtt-first-time-buyer-relief

Interest-Only vs. Capital Repayment

Most BTL landlords choose interest-only mortgages because:

✅ Lower monthly payments – You only pay the interest, not the capital

✅ Better cash flow – More profit each month

✅ Tax efficiency – Mortgage interest is a business expense (though restricted for personal landlords)

✅ Capital growth strategy – You rely on property value increasing, then sell or remortgage to repay the loan

Capital repayment BTL mortgages are available but less common:

• Higher monthly payments (you pay off the loan over time)
• Better for landlords who want to own the property outright eventually
• Required by some lenders for older borrowers (to ensure loan is repaid before age 75-85)

Personal Name vs. Limited Company BTL

Personal Name (Individual Ownership)

Pros:

• Simpler to set up (no company formation required)
• Slightly lower interest rates (typically 0.5-1% cheaper than Ltd Co)
• Easier to remortgage or sell

Cons:

• Income tax on rental profits at 20-45% (depending on your tax bracket)
• Mortgage interest relief restricted to 20% tax credit (since 2020)
• Rental income counts toward your personal income (may push you into higher tax bracket)

Best for: Basic-rate taxpayers, small portfolios (1-3 properties), first-time landlords

Limited Company (SPV)

Pros:

• Corporation tax on rental profits at 19-25% (lower than higher-rate income tax)
• Full mortgage interest relief (deductible as business expense)
• Easier to pass wealth to children (shares in company, not property)
• Protects personal assets (limited liability)

Cons:

• Higher interest rates (typically +0.5-1% vs. personal BTL)
• Company formation and accounting costs (£100-£500/year)
• More complex to extract profits (dividends taxed, or salary)

Best for: Higher-rate taxpayers (40-45%), portfolio landlords, long-term investors

Rental Coverage & Stress Testing

All BTL lenders assess whether the rental income is sufficient to cover the mortgage. This is called rental coverage or Interest Coverage Ratio (ICR).

How It Works

1. Lender calculates the monthly mortgage payment at a stress test rate(typically 5.5%, even if the actual rate is 5%)
2. Lender requires rental income to be 125-145%of this stressed payment
3. If rental income is too low, you’ll need a larger deposit to reduce the loan amount

Example

• Loan amount:£150,000
• Stress test rate:5%
• Monthly payment (interest-only):£687.50
• Required rental income (at 125%):£859
• Required rental income (at 145%):£997

If the property only rents for £800/month, you’d fail the 125% test and need to either:

• Increase your deposit (reduce loan amount)
• Find a lender with lower ICR requirements (some accept 120%)
• Choose a different property with higher rent

Buy-to-Let Mortgage Process

Step 1: Initial Consultation

Contact me to discuss:

• Your investment goals (cash flow, capital growth, or both)
• Your budget and deposit available
• Property type and location
• Your experience as a landlord (if any)
• Your tax position (personal vs. limited company)

Step 2: Agreement in Principle (AIP)

I’ll arrange an AIP (also called Decision in Principle) from a suitable lender:

• Soft credit check (no impact on credit score)
• Confirms how much you can borrow
• Valid for 60-90 days
• Helps you make offers on properties with confidence

Step 3: Property Search

Once you have an AIP, you can:

• Search for suitable investment properties
• Make offers with confidence (sellers take you seriously)
• Ensure rental income will meet lender requirements

Step 4: Full Mortgage Application

Once your offer is accepted:

• I’ll submit a full application to the lender
• Lender arranges a valuation (you pay the fee, typically £300-£500)
• Underwriters assess the application (typically 2-4 weeks)

Step 5: Mortgage Offer

If approved, the lender issues a formal mortgage offer:

• Valid for 6 months
• Sent to your solicitor
• Contains all terms and conditions

Step 6: Legal Process

Your solicitor will:

• Conduct property searches
• Review the mortgage offer and property title
• Exchange contracts (you’re legally committed)
• Complete the purchase (funds transferred, keys released)

Step 7: Completion & Drawdown

• Mortgage funds are released to your solicitor
• Purchase completes
• You receive the keys
• My broker fee (1% of loan amount) is invoiced on completion

Typical timeline: 8-12 weeks from offer accepted to completion (can be faster for cash buyers remortgaging, or slower for complex cases)

Why Choose Capital 8 Finance for Buy-to-Let Mortgages?

Whole-of-Market Access

At Capital 8 Finance, we have access to the UK’s full range of buy-to-let mortgage lenders, including:

High street banks: Barclays, Lloyds, NatWest, Santander

Challenger banks: Aldermore, Shawbrook, Paragon Bank, Kent Reliance

Specialist BTL lenders: Precise Mortgages, Foundation Home Loans, Landbay, Fleet Mortgages

Building societies: Nationwide, Skipton, Leeds Building Society

Limited company specialists: Paragon, Aldermore, Shawbrook, Foundation

Complex case specialists: For adverse credit, older borrowers, or unique property types

Whole-of-Market Broker Expertise

As an independent broker, I’m not tied to any single lender or product. I assess your situation objectively and recommend the most cost-effective solution—whether that’s a high street bank, challenger bank, or specialist lender.

Transparent Pricing

• Broker fee:1% of loan amount (e.g., £2,000 on a £200,000 mortgage)
• Payable on completion only(no upfront fees)
• No hidden costs– I’ll provide a full breakdown of all fees (lender, legal, valuation) before you proceed

Structured Approach

1. Initial consultation– Understand your investment goals, budget, and tax position
2. Lender selection– Match you to the most suitable lenders based on your profile and property type
3. Agreement in Principle– Secure an AIP so you can make offers with confidence
4. Application support– Prepare detailed submissions with all required documentation
5. Ongoing support– Liaise with lender, valuer, and solicitor to ensure smooth completion

Frequently Asked Questions

Can I get a buy-to-let mortgage as a first-time landlord?

Yes. Most lenders accept first-time landlords, but you’ll typically need to:

• Be an existing homeowner (own your own home, either outright or with a mortgage)
• Have a minimum personal income of £25,000-£30,000
• Have a clean credit history
• Provide a larger deposit (25-30%) for your first BTL property

Some lenders offer “first-time landlord” products with lower rates or more flexible criteria.

Do I need to own my own home to get a BTL mortgage?

Most lenders require you to be an existing homeowner, but there are exceptions:

• Some specialist lenders accept first-time buyers purchasing a BTL property (higher rates and deposits apply)
• If you’re living with family or renting, a handful of lenders will consider you

If you don’t own your own home, contact me to discuss your options.

How much deposit do I need for a buy-to-let mortgage?

Typically 25% of the property value, but:

• 15-20% depositsare available for strong applicants (high income, clean credit, low LTV properties)
• 30-40% depositsmay be required for:
  • First-time landlords
  • Older properties or non-standard construction
  • Portfolio landlords (4+ properties)
  • Expats or foreign nationals

What rental income do I need?

Lenders require rental income to be 125-145% of the mortgage payment (stress-tested at 5.5%).

Example:

• Loan: £150,000 at 5.5% interest-only = £687.50/month
• Required rent (at 125%): £859/month
• Required rent (at 145%): £997/month

If the property rents for less, you’ll need a larger deposit to reduce the loan amount.

Can I get a buy-to-let mortgage with bad credit?

Possibly, but it depends on the severity and recency of the adverse credit:

Minor adverse (missed payments, defaults under £500) – Accepted by many lenders if over 12 months old

Moderate adverse (CCJs, defaults £500-£5,000) – Accepted by specialist lenders if over 3 years old (higher rates and deposits apply)

Major adverse (bankruptcy, repossession, IVA) – Very limited options; typically need 6+ years since discharge

Contact me for an honest assessment of your situation.

Should I buy in my personal name or through a limited company?

Personal name is better if:

• You’re a basic-rate taxpayer (20%)
• You have a small portfolio (1-3 properties)
• You want the lowest interest rates

Limited company is better if:

• You’re a higher-rate taxpayer (40-45%)
• You’re building a large portfolio (4+ properties)
• You want full mortgage interest relief

I can help you model both options and choose the most tax-efficient structure.

Can I remortgage my existing buy-to-let property?

Yes. BTL remortgages are common for:

• Rate switches– Moving to a lower interest rate when your fixed term ends
• Equity release– Borrowing against increased property value to fund another purchase
• Debt consolidation– Paying off other debts with cheaper BTL finance

The process is similar to a purchase, but faster (typically 6-8 weeks).

What is a portfolio landlord?

A portfolio landlord is someone who owns 4 or more mortgaged BTL properties.

Since 2017, lenders must:

• Assess your entire portfolio (not just the property you’re buying)
• Stress-test all properties at 5.5% to ensure you can afford them
• Review rental income and mortgage payments across all properties

This can make it harder to get new BTL mortgages if your existing properties have tight rental coverage. Contact me for specialist portfolio landlord advice.

Can I let my property on Airbnb or as a holiday let?

Not with a standard BTL mortgage. Most BTL mortgages require an Assured Shorthold Tenancy (AST) to a long-term tenant (6-12 months minimum).

If you want to let on Airbnb or as a holiday let, you need a holiday let mortgage or short-term let mortgage. These are specialist products covered on our Specialist BTL page (link).

What are the tax implications of buy-to-let?

Rental income is taxed as income:

• Basic-rate taxpayers: 20%
• Higher-rate taxpayers: 40%
• Additional-rate taxpayers: 45%

Mortgage interest relief is restricted:

• Personal landlords: 20% tax credit only (since 2020)
• Limited company landlords: Full relief (deductible as business expense)

Capital Gains Tax (CGT) when you sell:

• 18% (basic-rate) or 24% (higher-rate) on gains above your annual allowance (£3,000 in 2025)

How long does it take to get a buy-to-let mortgage?

Typically 8-12 weeks from offer accepted to completion:

• Agreement in Principle: 1-3 days
• Full application submission: 1 week (once you have all documents)
• Lender underwriting: 2-4 weeks
• Valuation: 1-2 weeks
• Legal process: 4-8 weeks

Faster completions (6-8 weeks) are possible for straightforward cases with responsive solicitors.

Can I get a buy-to-let mortgage if I’m over 65?

Yes. Many lenders accept applicants up to age 75-85 at the end of the mortgage term.

Example:

• You’re 70 years old
• Lender accepts borrowers up to age 80
• Maximum mortgage term: 10 years

Some lenders require capital repayment mortgages (not interest-only) for older borrowers to ensure the loan is repaid during your lifetime.

What happens if my tenant stops paying rent?

You’re still responsible for the mortgage payments. Lenders assess affordability assuming you’ll need to cover payments during void periods.

Protection:

• Rent guarantee insurance– Covers rent if tenant defaults (typically 6-12 months)
• Legal expenses insurance– Covers eviction costs
• Cash reserves– Keep 3-6 months’ mortgage payments in reserve

Can I live in my buy-to-let property?

No. BTL mortgages are strictly for rental properties. If you want to live in the property, you need a residential mortgage, not a BTL mortgage.

If your circumstances change and you want to move into your BTL property, you must:

• Notify your lender
• Switch to a residential mortgage (remortgage)

Living in a BTL property without lender consent is mortgage fraud and can result in the lender demanding full repayment.

How to Apply for a Buy-to-Let Mortgage

Step 1: Initial Consultation

Contact me to discuss:

• Your investment goals and budget
• Property type and location
• Your experience as a landlord
• Your tax position (personal vs. limited company)

Step 2: Documentation Required

Personal details:

• Proof of ID (passport or driving license)
• Proof of address (utility bill, bank statement)
• Last 3 months’ bank statements (personal)
• Last 3 years’ tax returns (SA302) or payslips

Property details:

• Property address and purchase price
• Expected rental income (comparable properties on Rightmove/Zoopla)
• Tenancy type (AST to private tenants)

Portfolio landlords (if applicable):

• Schedule of all BTL properties (addresses, values, rents, mortgages)
• Last 6 months’ rental income statements

Limited company buyers:

• Company incorporation documents
• Company bank statements (last 3 months)

Step 3: Agreement in Principle

I’ll arrange an AIP from a suitable lender:

• Confirms how much you can borrow
• Valid for 60-90 days
• Soft credit check (no impact on score)

Step 4: Property Search & Offer

Use your AIP to:

• Search for suitable investment properties
• Make offers with confidence
• Ensure rental income meets lender requirements

Step 5: Full Application

Once your offer is accepted:

• I’ll submit a full application
• Lender arranges valuation (£300-£500)
• Underwriting (2-4 weeks)

Step 6: Mortgage Offer & Completion

• Lender issues formal offer (valid 6 months)
• Solicitor handles legal process (4-8 weeks)
• Completion: funds released, keys collected
• My broker fee (1%) paid from mortgage funds

Get Expert Buy-to-Let Mortgage Advice

Whether you’re a first-time landlord or an experienced portfolio investor, I offer:

✅ Free initial consultation to assess your investment goals

✅ Access to whole-of-market BTL lenders (high street, challenger, specialist)

✅ Transparent pricing (1% broker fee, payable on completion only)

✅ Support from Agreement in Principle through to completion

Serving property investors and landlords across Scotland, England, and Wales.

Capital 8 Finance – Expert buy-to-let mortgage advice for property investors at every stage.