Buy to let

A rental only works if the numbers work first.

Personal name or limited company, first property or fifth — we show you the rental calculation, the deposit required and the real cost before you make an offer.

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How a lender decides

The rental calculation

The stress test

Lenders test the rent against the mortgage payment at a higher assumed rate, not the rate you are paying. That test, not the property price, usually sets the maximum loan.

Your deposit

Twenty-five per cent is the common starting point. Lower deposits exist but tighten the rental calculation, so they often reduce what you can borrow.

Your own position

Most lenders want a minimum personal income and will look at your existing portfolio. Some accept first-time landlords; several do not.

That test, not the property price, usually sets the maximum loan.

Personal name or limited company

Two routes

In your own name

Simpler, cheaper to set up, and a wider choice of lenders. How the rental profit is taxed depends on your own circumstances.

Through a limited company

Usually an SPV set up for property. Rates are typically higher and lenders fewer, but many landlords choose it for tax reasons. Newly formed companies are acceptable to a good number of lenders, normally with personal guarantees.

Which is right for you

That is a tax question as much as a lending one. We will tell you what each route does to your borrowing and your rate; your accountant should tell you what it does to your tax.

Asked every week

Landlord questions

Can I let my current home instead of selling it?

Often yes, either with consent to let from your existing lender or by moving onto a buy-to-let mortgage. Which is better depends on your deal and how long you plan to keep it.

How many properties can I have?

Lenders differ sharply. Four or more mortgaged properties makes you a portfolio landlord, which changes who will lend and what they ask for.

Are buy-to-let mortgages interest only?

Most are, which keeps monthly costs down and leaves the balance to be repaid at the end. The exit plan matters, and lenders will ask about it.

What about holiday lets or HMOs?

They are assessed differently again, usually by specialist lenders. Tell us what you are planning before you offer, not after.

ROS Mortgages is not a tax adviser and nothing on this page is tax advice. Speak to your accountant about how rental income and ownership structure affect your tax position. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments.

Send us the property and the expected rent.

We will run the stress test before you offer, so you know the maximum loan rather than hoping for it.