There is a range of lenders willing to approve customers with bad credit. If you are considering a buy-to-let mortgage and you’re worried about your bad credit score, speak to our professionals at Rangewell. We can search the market for a lender that will meet your circumstances.
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- Buy to let mortgages
- Commercial mortgages
- Special arrangements for buy to let portfolio investors
- Residential property
- Repayments geared to your rental income
- Repayment and interest only available
- Rates from 2% over base rate
- Up to 80% Loan to Value available
- Purchase investment property
- Refinance existing property
- Commercial lending standards
- Arrangements tailored to your circumstances
Talk to Rangewell – the business finance experts
Building buy to let property portfolios has become complicated. We know every property lender in the market and can help you find simple answers.
At Rangewell we recognise your professional status, and we work harder to find you better solutions - which can include 100% finance for many of your needs.
Building a buy to let portfolio
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Buy-to-let portfolio mortgages are products designed to keep all of your buy-to-let mortgages and properties under one umbrella mortgage. It works by having all of the lendings from one provider in one place, rather than having multiple buy-to-let mortgages for different providers. This makes it much easier for landlords with large portfolios to manage their rental properties and to build their rental income.
To be considered as a portfolio landlord, you’ll usually need to own over four investment rental properties.
Buy-to-let portfolio mortgages
Buying residential property for letting out (buy-to-let) has become an increasingly popular way of investing to source rental income from their tenants. Purchasing a single property can mean steady returns with the right tenants, but building a more extensive portfolio of rental properties can make those returns even more worthwhile as you'll have a more constant and constant cash flow.
A change in recent government legislation now requires lenders to look at a landlord's full financial exposure when assessing them for a mortgage - hoping that riskier lending is avoided.
As a result of the recent changes, mortgage applications for portfolio landlords can be challenging to arrange and approve, and many lenders no longer service the sector. But, at Rangewell, we can provide answers - and access to the funding you need to source you the right mortgage deal.
What is a portfolio landlord?
A portfolio landlord is a person who has four or more buy-to-let properties. This definition applies to both sole and joint applications.
What is a buy-to-let Portfolio Mortgage?
A buy-to-let mortgage is a product that is designed for buy-to-let landlords to help manage their multiple investment properties.
It allows them to take out one singular mortgage to cover all of the properties they own, and a portfolio mortgage will allow you to have all of your buy-to-let mortgages in one place.
It’s treated as one account, so instead of having different mortgages for each property, your whole portfolio will be managed by one lender with one monthly payment.
Your portfolio will be registered as a limited company, and all of your costs and finances will be treated like they would be for any other business. Usually, a lender would require a landlord to own four properties to be eligible for a portfolio mortgage.
The difference between a conventional mortgage and a buy-to-let mortgage
If you buy a home with a conventional mortgage, the lender will include clauses that will prevent you from letting out the property. However, a buy-to-let mortgage doesn't have the same restrictions as a residential mortgage.
Buy-to-let mortgages are more flexible, but it's important to note that rates and fees will usually be higher than a standard residential mortgage.
Residential mortgages are based on your personal income. Buy-to-let Mortgages are based on the revenue your property will generate.
Speak to a mortgage broker today who can provide you with the best mortgage advice.
The lending criteria for buy-to-let mortgages
The mortgage provider will make a rent to interest (RTI) cover calculation. This means that you will need to show that you can obtain enough rental income from a tenant to cover the interest on the mortgage. RTI cover calculations vary between lenders. However, the rental income usually has to be between 125% and 130% of the monthly mortgage repayment. Many lenders also require a minimum income of £25k per annum in addition to the income made from rent.
There may be an upper limit to the amount of property or level of lending you can have with a buy to let mortgage.
Use our quick quote mortgage calculator for an overview of your monthly repayment amounts.
What is a Commercial Mortgage?
Like buy-to-let mortgages, commercial mortgages are secured on the property itself.
The rates and terms for a commercial mortgage can be arranged individually, and your financial position and the size and profitability of your existing portfolio will be taken into account.
If your investment plans involve building up an extensive portfolio, including a mix of residential and commercial properties, it may be possible to provide the level of funding you need for your entire property holdings with a commercial mortgage.
However, you may need to make a significant financial contribution from your own funds because lenders will not offer 100% finance with a commercial mortgage.
Typical loan-to-value ratios are around 70%, although some lenders may be willing to offer more.
Commercial mortgage deals can be either fixed-rate or variable rate, and you may be able to choose between a repayment mortgage option. With an interest-only mortgage, you only pay the interest each month. This reduces the cost of your investment.
Refinancing a property portfolio
If you have already built up an extensive property portfolio, you will know that even a small difference in the interest rate will make a substantial difference to your monthly repayments. Getting the most competitive loan rate can make an essential contribution to your profits.
Property remortgaging or refinancing could help you reduce the repayments you make each month.
Property remortgaging works by letting you pay off an existing mortgage arrangement and replacing it with a new one at a lower cost. Your properties will probably have appreciated in value over time, and we may be able to help you secure a better deal thanks to the lower loan-to-value (LTV), especially if you have an entire portfolio to refinance.
Your property has built up equity while you have owned it. By refinancing, you may be able to release some of that equity, providing cash to allow you to acquire additional property.
How many properties can a portfolio landlord have?
As long as you meet your lender’s specific criteria, there’s no limit on the maximum number of buy-to-let mortgages you can have. Different lenders will have their own rules around the maximum number of loans they will be prepared to grant an individual.
To find out more about limited company portfolio mortgages speak to one of our friendly staff members, who will be more than happy to help.
What are the requirements for a portfolio landlord to get a mortgage?
With all new mortgage applications, lenders will look to see if you can cover the monthly mortgage interest payment.
Lenders will also assess the existing portfolio to ensure the loan-to-value rate is sustainable for you. This assessment will be based on your entire portfolio, including any new properties and any rental properties without a mortgage.
How can a landlord remortgage a buy-to-let portfolio?
What a lender will offer you will depend on how much you want to borrow and how much property you own.
To get the best buy-to-let mortgage, you’ll need to have your finances in order. Here are just some examples of things lenders will consider when working out how much they’ll lend you, and when processing your re-mortgage application.
- Rental income, personal income, and personal assets
- Your current equity and the size of the remortgage you require
- Your credit history, credit score, and current income
Just some things you’ll need to look out for when looking for the best deal are:
- Your outstanding mortgage balance
- Does your current lender require an early repayment fee if you switch
- The higher your LTV, the fewer products may be available
What are the tax rules around buy-to-let portfolios?
Due to recent mortgage regulations, landlords will only be able to offset 20% of their mortgage interest payments when filling inter tax returns.
This change is the final chapter in the government’s tapering off of mortgage interest tax relief, which has been going on since 2017.
For basic rate taxpayers, capital gains tax (CGT) on a buy-to-let second property is 18%, and if you’re a higher rate tax payer, it’s charged at 28%.
If you sell your buy-to-let property for profit, you’ll pay CGT if your gain exceeds the annual threshold of £12,200.
You can reduce CGT by offsetting Stamp Duty costs, solicitor fees, and estate agent fees or losses made on a sale of buy-to-let property in a previous tax year by deducting these from any capital gain.
Any gain from the sale of your property should be declared on your Self Assessment tax return for that year.
Speak to Rangewell for expert advice on where you stand with tax and buy-to-let mortgages and to find out more about our range of products available to you.
What lenders offer buy-to-let portfolio mortgages?
Various lenders offer portfolio landlord mortgages, and each will have their own criteria that must be met. Speak to Rangewell to find out which portfolio mortgage lenders can provide you with the right finance option to suit your needs. We have a variety of lenders who can help source the right deal for you.
Getting the help you need
All types of property investment inevitably involve high costs. When your plans include buying multiple properties, it is essential to have expert help to get the kind of funding that is right for you - whether you are expanding your portfolio or refinancing your existing property investments. Lenders will vary significantly in what they offer, and even a fraction of a percentage point can make a substantial difference to what you pay each month. It means that getting expert support to find the right deal - or deals if you are building a portfolio over time - is essential to save money.
At Rangewell, we help investors of all kinds find the finance they need. We cover the entire UK lending market, which means we can help you find the most cost-effective property finance for all property investment needs - and to help you make the most of your buy to let plans. Our knowledge can not only help you secure the funding you need - it can save you a great deal of cash.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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Improve your returnsExperienced investors are seeing the opportunity to raise the overall rent earned from a property by renting multiple properties
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Maximise your profitsWe can help you find the most competitive funding, ensuring that you can maximise your returns.
Frequently asked questions
Have a question?
Buy-to-let mortgages will be available on a variety of property types. The type of property can impact the buy-to-let mortgage products available. Different buy-to-let property types include:
- Houses, flats (apartment block)
- Houses in multiple occupation (this is where unrelated tenants have access to shared living spaces such as kitchens or bathrooms)
- Multi-unit freehold blocks (these are purpose-built flats or houses converted into flats)
- Multi-let and student-lets
- Semi-commercial properties
Yes, buy-to-let investment is available in Scotland. However, if you’re considering Scotland as a destination for your investment, you should be aware of the trends underlying this space.
If you’re looking to expand your property investment in Scotland, speak to a specialist mortgage broker who can find an investment solution that will suit your needs. We have a dedicated team who can help at every step of your mortgage application.
Most lenders will have a maximum borrow age at the time of application between 79-85. Some lenders will have no upper age limit; it depends on the lending criteria of the lender.
The minimum deposit for a buy-to-let deposit is usually 25% of the property’s value (although it can vary between 20-40% depending on the lender’s criteria).
Question Not Answered?
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