Updated: December 09, 2021

First-Time Buyer Buy-to-Let Mortgages

Buy-to-Let mortgages for first time buyers are easier to get than you might think. Read our in-depth guide to find out how you can do it!

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 09, 2021

Traditionally, rental properties were the sole domain of existing home owners with previous investment experience. However, with property prices still on the increase, more and more first-time buyers are now entering the buy-to-let market before buying their own home to live in.

By following this guide you’ll have a clearer understanding of what’s involved with securing a buy-to-let mortgage as a new landlord, which lenders can help you and how to find the best rates available.

Can a first-time buyer get a buy-to-let mortgage?

In a word, yes, it’s possible to secure a buy-to-let (BTL) mortgage as a first-time buyer and landlord. However, your options could be limited, with potentially higher interest rates and larger deposit requirements becoming major obstacles.

As a first-time buyer – whether for a buy-to-let or residential – you simply have no previous experience or mortgage repayment history to provide a lender with the evidence and/or confidence they need that you will be able to meet the obligations of your new home loan.

As a result, some lenders will simply see you as too high risk and reject your application. Others may accept, but on terms which you may find too prohibitive.

The good news is, there are lenders who have the right expertise to consider buy-to-let (BTL) mortgage applications from first-time landlords. The challenge is knowing where, and how, to find them, and this is where the brokers we work with come in.

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How to get a buy-to-let mortgage if you’re a first-time buyer

To help you stand a better chance of securing a buy-to-let mortgage as a first time landlord here’s a number of simple steps you can take to make the process much more straightforward.

Step 1. Prepare your documentation:

ensure you have all the paperwork the lender has requested to go through your application. As a FTB applying for a BTL mortgage it’s a good idea to include as much supporting evidence as you can. Important documents include proof of earnings, a forward rental forecast, proof of address and proof that you have your deposit available now. Our mortgage application guide has the complete list of documents you will need for your application.

Step 2. Download your credit record:

understanding what your report shows about your creditworthiness is really helpful so a check of your credit history before you begin your buy-to-let mortgage application is another important step to take. Your report will show you everything a potential lender will see and if you know what’s there you can be clear and confident in any answers to potentially tricky questions about your financial history. You can download your credit reports from the credit reports hub here on Online Money Advisor.

Step 3. Speak with an experienced mortgage broker:

it’s a good idea to speak with a mortgage advisor experienced with clients in your situation. Buy-to-let mortgages can be more complex than residential mortgages which means for first-time buyers it can be particularly challenging. The right expert will help you understand everything you need to know about getting a yes to your application. They will help you throughout the process, know which lenders are the best to approach for your needs and give you a much better chance of a successful application, first time.

Our free, broker-matching service assesses your needs quickly and puts you in touch with a broker experienced with first-time landlord buy-to-let mortgages. Get in touch to find out more and receive valuable advice.

What criteria do you need to meet?

Here’s what you will need to provide for a lender to get a buy-to-let mortgage…

Bullet Tick An approved forecast/plan of the achievable rent. Ideally Lenders prefer to see a rental yield of between 125%-145% of the monthly mortgage payments
Bullet Tick Proof of (non-rental) income - most lenders expect to see a minimum £25,000 per annum
Bullet Tick Proof of your address and evidence of your intention to continue living there and that you will not move into your investment property
Bullet Tick Size of your deposit (see below)
Bullet Tick A strong credit rating
Bullet Tick Some lenders might want to see proof of your ability to pay for additional landlord-related costs, such as insurance and a contingency for emergencies.

Proving that you have a separate income to pay your own rent as a tenant, that your intentions are to rent the property out and not live in it, while also having a suitable deposit, will all help improve your chances of approval.

Deposit requirements

As with most mortgages, the larger your deposit, the better chance you have of a lender saying yes to your application as a first-time landlord. With just a 10% deposit, you will be able to find a lender willing to lend you a buy-to-let mortgage, however, the terms will be strict with a high interest rate.

While a 20% deposit will put you in a better position, having a 25% or higher down-payment will give you the best chance of securing the mortgage you want. Having that size deposit will help reduce your risk profile in the eyes of the lender and help you secure a lower mortgage interest rate, too.

Other types of first-time buyer BTL mortgages

While you may be interested in a buy-to-let mortgage that allows you, as a first-time buyer, to buy an investment property there are other BTL mortgage options to consider, such as:

Guarantor buy-to-let (BTL) mortgage

If you wish to invest in property as a first-time landlord but your earnings don’t fit the criteria of a lot of lenders, then a guarantor BTL mortgage could be for you. This type of mortgage doesn’t mean the guarantor’s name is on the deeds, but  their earnings can count in addition to or even in place of you, the buyer. It’s a good option if a parent or close family member is able and prepared to help you .

Buy-to-let limited company mortgage

Another option is to set up a limited company and apply for a BTL limited company mortgage. The benefit here is the way your rental income is taxed. As a private BTL mortgage buyer, the rental income is taxed through the income tax process which can push your annual earnings to the next bracket and result in higher tax payments.

If you create a limited company and buy the BTL investment through that, which is possible as a first-time buyer, the rental income is taxed at the flat corporation tax rate (currently 19%) and doesn’t affect your personal income tax status.

Joint borrower sole proprietor mortgage

A third possibility is a joint borrower sole proprietor mortgage which allows you as a first-time landlord to buy an investment property but only your name is on the deeds even though the earnings of the additional borrower are used as part of the affordability and risk calculations.

Get matched with the right buy-to-let broker today

Getting a mortgage can be complicated, time-consuming and stressful, particularly for first-time buyers applying for a buy-to-let mortgage. By speaking with the right advisor you can find the best mortgage for your needs and have all the help required to get through the process with the best chance of approval.

If you get in touch with us we’ll match you with a broker who is experienced in helping first-time landlords secure their BTL mortgage. You can have a free, no obligation chat with the advisor we connect you with and if you wish to take it further they will make your mortgage application simple and relatively stress-free.


Can you get an interest only BTL mortgage as a first-time buyer?

Yes, this is normally the option taken for most buy-to-let properties as interest-only mortgages are cheaper (because there’s only the interest element to pay on a monthly basis).

Be mindful, though, that you will need a plan for how to pay off the capital element. Most landlords either allow the excess rental profits to build up through the term or simply sell the property for a profit and pay off the capital that way.

Can you get a BTL mortgage as a first-time landlord with bad credit?

Some lenders will consider your application but the eventual decision will depend on your specific situation and what type of bad credit you have. An advisor can give you a good idea of your chances.

Will you have to pay stamp duty?

As a first-time buyer, even if your first purchase is a BTL investment, you won’t need to pay the BTL stamp duty rates, which are higher than the standard home mover rates. However, because it’s an investment and you don’t intend to live there, you won’t qualify for the first-time buyer relief rates, which are lower than standard home mover stamp duty rates, either.

Can you live in the BTL property?

No, a BTL mortgage is agreed under the proviso that the property will be lived in by a tenant, with a contract and paying rent, but not you, as the owner.

Can you change your BTL mortgage to a residential mortgage?

Yes, if circumstances change, this is an option. However, if you have agreed a fixed-term mortgage there may be penalties to pay if you end the BTL mortgage before the end of the fixed-term period to remortgage it to a residential mortgage.

Ask us a question

We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in Buy-To-Let mortgages. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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