# Buy-to-Let Mortgages

> How buy-to-let mortgages work, why they need a bigger deposit, how lenders assess rental income, and the tax and regulation differences from a residential mortgage.

Canonical page: [/mortgages/buy-to-let-mortgages](/mortgages/buy-to-let-mortgages/) · Last reviewed: 2026-08-22

A buy-to-let mortgage is for buying a property to rent out rather than to live in. It works differently from a residential mortgage — in the deposit required, how lending is assessed, and how it is regulated and taxed.

## Key information

- Used to buy a property to let, not to live in
- Usually needs a larger deposit — commonly at least 25%
- Lending is based mainly on the expected rental income, not just your salary
- Most buy-to-let mortgages are not regulated by the FCA

## How buy-to-let mortgages work

A buy-to-let mortgage lets you borrow to buy a property you intend to rent out. Many are interest-only, so your monthly payments cover just the interest and the capital is repaid at the end — often by selling the property. Lenders usually require [a deposit of at least 25%](/mortgages/mortgage-deposits), and rates and fees tend to be higher than on residential mortgages.

## How lenders assess the lending

Rather than focusing on your salary, lenders assess buy-to-let borrowing mainly on the rent the property is expected to generate. They typically apply an “interest coverage ratio”, requiring the expected rent to exceed the mortgage interest by a set margin (often around 125% to 145%), and stress-test it at a higher notional interest rate. Many lenders also set a minimum personal income and a maximum age.

## Regulation and your protections

Most buy-to-let lending is not regulated by the FCA, because it is treated as a business rather than a consumer activity — so some protections that apply to residential mortgages may not apply. An exception is “consumer buy-to-let”, broadly where you did not actively choose to become a landlord, such as with an inherited property, which is regulated. Check whether your mortgage is regulated, and deal only with firms you have [confirmed on the FCA Register](/tools-calculators/firm-checker).

## Tax and landlord responsibilities

Being a landlord brings tax and legal responsibilities. Buying an additional property usually attracts the higher rates of Stamp Duty — [a 5% surcharge](/mortgages/stamp-duty#additional-property-surcharge) on top of the standard rates in England and Northern Ireland. Rental income is taxable, and mortgage interest no longer reduces your tax bill as it once did; instead a basic-rate tax credit applies. You also take on legal duties as a landlord, from safety checks to protecting tenants’ deposits. Because the tax rules are complex, many landlords take professional advice.

## Your rights

- Consumer buy-to-let mortgages are regulated by the FCA; most other buy-to-let lending is not, so check which applies to you.
- Deal only with a lender or broker authorised by the FCA where authorisation applies — confirm this on the FCA Register.
- If a regulated firm treats you unfairly you can complain and escalate to the Financial Ombudsman Service free of charge.

## Official sources

- [FCA — buy-to-let mortgages](https://www.fca.org.uk/consumers/buy-let-mortgages)
- [GOV.UK — higher rates of Stamp Duty on additional property](https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property)
- [Check a firm or adviser on the FCA Register](https://register.fca.org.uk)

## Related

- [Stamp Duty (SDLT)](/mortgages/stamp-duty/)
- [First-Time Buyer Mortgages](/mortgages/first-time-buyer-mortgages/)
- [Mortgage Affordability](/mortgages/mortgage-affordability/)
- [Fixed vs Variable Rates](/mortgages/fixed-vs-variable-rates/)

## Sources

- MoneyHelper — [Buy-to-let mortgages explained](https://www.moneyhelper.org.uk/en/homes/buying-a-home/buy-to-let-mortgages) (accessed 2026-08-22)
- FCA — [Buy-to-let mortgages](https://www.fca.org.uk/consumers/buy-let-mortgages) (accessed 2026-08-22)
- GOV.UK — [Higher rates of Stamp Duty Land Tax](https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property) (accessed 2026-08-22)