A Complete Guide to Buy to Let Mortgages for First-Time Landlords
Becoming a landlord for the first time is exciting – but it can also feel a bit overwhelming. There’s a lot to think about, from choosing the right property to understanding how buy to let mortgages actually work.
At ABC Mortgages, we help first-time landlords across Sittingbourne and Kent understand their options, avoid common mistakes, and start their property investment journey with confidence.
This guide walks you through everything you need to know about buy to let mortgages for first-time landlords – in simple, jargon-free language.
What are Buy to Let Mortgages?
A buy to let mortgage is a type of mortgage specifically designed for properties that will be rented out to tenants, rather than lived in by you.
It’s different from a standard residential mortgage because:
– The lender assesses the rental income the property can generate
– You’ll usually need a larger deposit (often 20–25% or more)
– Interest rates and fees can be slightly higher than residential deals
Many buy to let mortgages are arranged on an interest-only basis, meaning you only pay the interest each month and repay the full loan at the end of the term. Others are on capital repayment, where you gradually pay off the loan balance over time.
At ABC Mortgages, we’ll help you decide which structure is right for your investment plans.
Who Qualifies for Buy To Let Mortgages as a First-Time Landlord?
You’re usually classed as a first-time landlord if:
– You’re buying your first ever rental property, or
– You’ve inherited a property and want to let it out, or
– You’re moving home and keeping your old property to rent out
Being new to letting doesn’t mean you can’t get a good mortgage. Many lenders are happy to work with first-time landlords, as long as the figures add up and you can show you’re a responsible borrower.
Our job at ABC Mortgages is to match you with the lenders that are comfortable with beginners and supportive of your long-term investment plans.
How Do Buy to Let Mortgages Work?
Lenders look at buy to let mortgages differently to residential ones. Here’s what they typically assess:
– Rental Income
Rather than basing everything purely on your salary, lenders use the property’s expected rental income to see if the mortgage is affordable. They’ll usually want the rent to cover the monthly mortgage payment by a certain percentage (called the Interest Coverage Ratio, or ICR), often around 125%–145%.
– Deposit and Loan-to-Value (LTV)
You’ll typically need a larger deposit for buy to let – often 25% or more. The lower your LTV (loan-to-value), the better the chances of accessing competitive rates.
– Your Personal Circumstances
Even though it’s an investment property, lenders will still look at:
– Your income and outgoings
– Your credit history
– Your age and overall financial position
At ABC Mortgages, we help you understand each lender’s criteria and position your application in the best possible way.
What Deposit Do You Need for Buy to Let Mortgages?
For most first-time landlords, the minimum deposit is usually around 20–25% of the property’s value.
For example:
– Property price: £200,000
– 25% deposit: £50,000
– Mortgage amount: £150,000
A higher deposit can give you:
– Better interest rates
– Lower monthly payments
– More choice of lenders and products
If you have more than the minimum deposit, it’s often worth using it to reduce your borrowing and improve the overall deal.
Should First-Time Landlords Choose Interest Only or Repayment Buy to Let Mortgages?
This is one of the biggest decisions you’ll make.
Interest Only
– You pay only the interest each month
– Monthly payments are lower, so your rental profit can be higher
– You still owe the full mortgage amount at the end of the term
– You’ll need a clear repayment strategy (e.g. selling the property or using savings)
Capital Repayment
– Each month you pay interest + part of the loan
– Monthly payments are higher
– Over time, your debt reduces and you build more equity
– At the end of the term, the mortgage can be fully repaid
Some first-time landlords prefer interest only for cash flow and flexibility, while others feel more comfortable knowing they’re gradually paying off the loan.
At ABC Mortgages, we’ll walk you through both options and show you what the numbers look like for each.
How Much Rent Do You Need to Qualify For Buy To Let Mortgages?
For buy to let, it’s not just about your income – the property’s rental potential is key.
Most lenders want the expected rent to cover the mortgage payment by at least 125%–145%, depending on the interest rate and your tax position.
For example:
– Monthly mortgage interest: £600
– Lender requirement: 135% rental cover
– Required rent: £600 × 1.35 = £810 per month
To make sure your application is realistic, it’s important to:
– Research local rental values
– Get a letting agent’s opinion if needed
– Avoid overestimating the rent
Top Tip: Always check realistic rental income in your area before making an offer on a buy to let property.
Costs to Budget For When Applying for Buy to Let Mortgages
A successful buy to let isn’t just about the mortgage. You’ll need to budget for:
Mortgage payments
Letting agent fees (if you use one)
Repairs and maintenance
Landlord insurance
Safety checks (Gas Safety, EICR, EPC, smoke alarms, etc.)
Void periods when the property is empty
Tax on rental income
Stamp Duty – including any additional property surcharge where applicable
We’ll help you understand these costs so you’re not caught out later.
Pros and Cons of Buy to Let Mortgages for First-Time Landlords
Like any investment, becoming a landlord has advantages and risks.
Pros
-Regular rental income
-Potential long-term capital growth if property prices rise
-Some expenses are tax-deductible
-Opportunity to build a portfolio over time
Cons
-Property values and rents can go down as well as up
-You’ll have legal responsibilities as a landlord
-There may be unexpected repair costs
-Mortgage rates, regulation and tax rules can change
A clear strategy – and the right support – can help you decide if buy to let is right for you.
How to Apply for a Buy to Let Mortgage as a First-Time Landlord
Here’s the typical process:
Speak to a broker – Talk to a specialist like ABC Mortgages to understand your budget and options.
Assess affordability and rental figures- We’ll help you estimate realistic rent and check lender criteria.
Choose your mortgage type- Decide between interest only or repayment, and consider deposit size.
Get an Agreement in Principle (AIP)- This gives you an indication of how much you may be able to borrow.
Make an offer on a property- Once you’ve found the right investment, you can put your offer forward.
Submit your full mortgage application – We’ll help gather documents and submit the application to the lender.
Valuation and underwriting- The lender values the property and checks your application in detail.
Mortgage offer issued- Once approved, your solicitor will work towards completion.
Completion & letting- You complete the purchase and can start preparing the property for tenants.
We’ll guide you through every step – answering questions, dealing with the lender, and helping you understand exactly what’s happening.
Costs to Budget for When Applying for Buy To Let Mortgages
Navigating mortgages on your own can be daunting – especially as a first-time landlord. Working with a broker like ABC Mortgages offers several advantages:
Whole-of-market access – we can approach lenders that you may not find on the high street
Experience with first-time landlords – we know which lenders are more flexible and welcoming to beginners
Stronger applications – we help you present your case clearly, improving your chances of approval
Time and stress savings – we handle comparisons, paperwork, and communication with lenders
Tailored advice – we’ll help you choose structure, term, and lender to match your plans
Our mission is to make things simple, clear, and as stress-free as possible.
FAQs – Buy to Let Mortgages for First-Time Landlords
Can I get a buy to let mortgage as a first-time buyer?
Some lenders will consider this, but criteria can be stricter. It’s important to work with a broker to find the right options.
Can I rent out my current home on a residential mortgage?
Not usually – you’ll need consent to let from your lender or a proper buy to let mortgage. Always check with your lender before renting it out.
How much rental income do I need?
It depends on the lender and interest rate, but most expect rent to cover the mortgage payment by at least 125%–145%.
Can I use a gifted deposit for a buy to let?
Some lenders accept gifted deposits, others don’t. We’ll match you with the right lender if you’re using gifted funds.
What type of properties do lenders prefer for buy to let?
Standard houses and flats are usually easiest to mortgage. More unusual properties (above shops, HMOs, or non-standard construction) may require specialist lenders.
Do I need landlord insurance?
Yes – standard home insurance isn’t enough. You’ll need landlord insurance to protect against tenant-related risks, loss of rent in some cases, and property damage.
Get Buy to Let Mortgage Advice from ABC Mortgages
At ABC Mortgages, we love helping first-time landlords take their first confident step into property investment. Whether you’re just exploring the idea or ready to apply, our friendly advisers in Sittingbourne and across Kent are here to help.
We’ll explain your options, find suitable buy to let mortgages for first-time landlords, and support you from your first question right through to completion.
Contact us today to speak to one of our advisers – and make your first investment as easy as ABC.
