Mortgages
Buy-to-Let Mortgages
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
On this page
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%, 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.
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 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 & protection
- 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.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Buy-to-let mortgages explained (opens in a new tab). Accessed 22 Aug 2026.
- FCA, Buy-to-let mortgages (opens in a new tab). Accessed 22 Aug 2026.
- GOV.UK, Higher rates of Stamp Duty Land Tax (opens in a new tab). Accessed 22 Aug 2026.