Buy-to-Let Mortgages for Portfolio Landlords

Multi-property mortgages can make life easier for buy-to-let landlords by consolidating their investment properties in one place, but how do these agreements work, what are the benefits, and how do you apply for one? You will find the answer to these questions and much more in this guide.

Are there specific mortgages for portfolio landlords?

Yes. There are multi-property mortgages available for portfolio landlords who want to convenience of managing and servicing their buy-to-let mortgages in one place.

Also known as portfolio mortgages, these agreements allow landlords to take out a single consolidated mortgage for all of their properties with a single lender, rather than have individual mortgages for each one.

If you were to take out a multi-property mortgage, all of your buy-to-let investments can be placed under this umbrella, you would receive one combined account statement each month, and make a single payment based on the average rate of the mortgages you’ve consolidated.

The borrowing would be based on a combined loan-to-value (LTV) ratio that takes into account the combined equity you hold across your portfolio.

Eligibility criteria

To qualify for a buy-to-let multi-property mortgage, you will need to meet the below criteria:

• Portfolio size: Some lenders will only offer you a multi-property mortgage if you hold at least four properties with them. Others place a limit on the maximum number of properties you can hold overall, with 5-10 being standard.
• Number of properties with other lenders: Some lenders will place a cap on the number of buy-to-let properties you can hold with other lenders. Around 5-10 is standard but some mortgage providers have no limit at all.
• Maximum borrowing: Affordability is based on rental potential. All of the properties under your umbrella will need to generate rental income that is 125-145% of the total monthly mortgage payments. Additionally, some lenders have a maximum borrowing cap of several million, while others will stretch to £10 million and even higher.
• Minimum property value: Some lenders will only offer a multi-property mortgage if the combined value of your properties is over a certain amount. £500k is a common cap.
• Business plan: Some mortgage providers will expect to see a business plan if you are borrowing against the combined value of your portfolio and plan to expand it.
• Property types: Most lenders will accept a diverse range of property types, while others might decline your application if any of your properties are a specific kind that they consider higher risk, such as HMOs or ex-local authority buildings.
• LTV: Typical LTV requirements for portfolio mortgages start at around 75%.

Don’t worry if you don’t tick all of the boxes above. Our mortgage brokers have access to specialist buy-to-let lenders who can be very flexible

How to get a buy-to-let portfolio mortgage

To get started, you can browse rates and deals from buy-to-let lenders for free through Teito. Once you have selected one that fits your requirements, one of our brokers who specialises in portfolio mortgages will pick up your case to help you with your application.

They will guide you through the following steps:

• Sourcing bespoke rates and deals for portfolio landlords
• Drawing up a business plan
• Downloading and optimising your credit reports
• Finding your ideal lender and submitting your application

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What are the benefits of a portfolio mortgage?

Landlords with multiple buy-to-let properties tend to choose portfolio mortgages over individual ones because they have the following advantages:

Convenience: It can be easier for landlords to keep track of their finances and budget with their mortgage payments unified.

Exclusives rates and deals: Some lenders specialise in portfolio mortgages, which occasionally means you could secure a more cost-effective rate across all of your properties, compared to the deals you’d get paying individual rates on each one.

Tax efficiency: Funds withdrawn from a portfolio are now taxed entirely, rather than on net income. You can also retain funds for expansion and renovation, and lower your corporation tax bill since outgoings are classed as expenses. 

Expansion potential: Holding all of your properties with one lender under a single umbrella can make things more straightforward if you need to release equity to expand your portfolio. You can refinance them all in one go, rather than have to arrange multiple remortgages, potentially with different lenders.

While there are numerous benefits to a buy-to-let portfolio mortgage, they aren’t for everyone, so it’s important to discuss your plans with a mortgage advisor before proceeding.

What interest rate to expect

Each buy-to-let property within your portfolio will have its own interest rate, and the rate you will pay each month will be an average of those rates across your property range. At the time of writing (July 2024), average interest rates for buy-to-late start at between 5% and 5.5%, so a typical rate for a multi-property agreement would be within this range.

The exact interest rate you will pay will depend on a number of factors, including:

• How much equity you hold
• The condition of your credit reports
• Whether you own the properties through a limited company (rates can be higher)

The best way to secure a lower rate on your multi-property mortgage is by speaking to a buy-to-let mortgage advisor before you apply. Not only can their knowledge and experience in the market make a difference, they often have access to exclusive rates and deals too.

Best lenders for portfolio landlords

A mixture of high street mortgage providers and specialist lenders will offer mortgages for portfolio landlords, subject to them meeting their eligibility criteria.

The table below shows examples of lenders who will offer these mortgages as well as the maximum number of properties you can hold and maximum aggregate borrowing.

The above criteria was accurate at the time of writing (June 2024)

Lenders for landlords with large portfolios

There are a fair number of mortgage lenders available if you have a portfolio of more than 10-20 properties. The lenders below have no specific limit on portfolio sizes:

• Aldermore
• The Family Building Society
• HTB
• Fleet Mortgages
• Foundation Home Loans

The lenders we have listed above are merely a small sample of the market presented for example purposes. You can browse interest rates, including exclusive deals, for free across the whole of the market and access broker support through Teito.

Limited company portfolio mortgages

Some lenders will let you take out a portfolio mortgage through a limited company, and there are tax benefits to doing this, such as paying corporation tax on the rental profits rather than income tax on your rental returns. Rates can sometimes be higher for limited company borrowers and lenders usually have specific criteria for these arrangements.

The additional criteria for limited company portfolio mortgages is as follows:

• The company must be set up as a special purpose vehicle (SPV)
• A maximum number of shareholders/directors (usually 2)
• Some lenders will insist that the company is registered in England, Wales or Scotland
• The company’s records must match with its Companies House listing

You can read more about limited company mortgages in our standalone guide.

Why use Teito for your buy-to-let mortgage needs?

You can browse buy-to-let mortgage rates and take advantage of a free, no-obligation chat with a broker who specialises in portfolio mortgages through Teito.

Here are just a few of the reasons why landlords choose us:

• You can often access exclusive rates and deals
• Our brokers can offer bespoke advice for portfolio landlords
• We are 5-star rated on leading review websites
• You can secure an agreement in principle in minutes

Ready to compare deals and access expert broker support? Get started here.