Head of Content
Mortgage Advisor & Director
What is a self-financing buy to let mortgage?
With buy to let mortgages, lenders view the property as self-financing, which means that the rental income must comfortably cover the mortgage repayments.
The monthly rental income must typically cover at least 125% of the mortgage repayments, although this varies from lender to lender. For portfolio mortgages, the aggregate portfolio rental cover ratio is typically higher at 145%.
While lenders assume the property will cover the mortgage repayments, many also require the landlord to have a minimum income of £25,000, although some lenders have no minimum income requirement.
What happens if the rental income does not meet the mortgage repayments?
In cases where the rental income does not meet the self-funding calculation, the mortgage amount must then be reduced to fit. Unfortunately, personal income is typically not permitted to meet the shortfall.
How can I improve my chances?
Your best chance to secure a BTL mortgage is to engage an experienced broker.
Not only will they be able to recommend the most suitable lender and boost your chances of approval, but they will also be able to help you get the best rates possible on your new mortgage.
At Teito, we are a whole of market mortgage broker, which means we have access to thousands of mortgages not available to the general public, including those who specialise in buy to let mortgages. If you're struggling to get a BTL mortgage, complete our simple online form today and get the process started.
Our team of experts have helped many people like you to get the best deal on their new BTL mortgage. Start comparing deals today by completing our simple online form, and we promise to make your mortgage journey as stress-free as we can!
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.
