Updated: December 16, 2021

Getting a Buy-to-Let Mortgage in Northern Ireland

Looking for a buy-to-let mortgage in Northern Ireland? This guide will tell you everything you need to know.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 16, 2021

Buy-to-let (BTL) mortgages are available in Northern Ireland, but there are a few specifics you need to know about when buying an investment property in this country.

This guide explains how to apply for BTL finance, what to look out for and how you can maximise your profit for a Northern Irish rental property.

Can you get a buy-to-let mortgage in Northern Ireland?

Yes, of course. But before you even start to view properties, it’s important to find out how much you can borrow and which lenders are available to meet your specific circumstances.

To get approved for a buy-to-let mortgage, whether you’re an experienced investor or a first-time landlord, you’ll need to provide a lender with the requisite confidence that you’re a trustworthy borrower able to afford the repayments for the mortgage you want.

A mortgage broker’s advice is a real asset with this part of the process. Not only do they check your eligibility without damaging your credit score but they can manage the application process for you from start to finish.

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How to get a buy-to-let mortgage in Northern Ireland

If you’re looking for a buy-to-let mortgage in Northern Ireland there’s a few simple steps you can take right from the outset that will make the process much more straightforward.

  1. Gather your documents together – Mortgage lenders will need these to confirm your identity and check your income. Download 3 months of bank statements, payslips if you’re employed, certified yearly accounts if you work for yourself.  Also, have a check on your credit report to make sure it’s in good shape before you apply.
  2. Speak to a mortgage broker – Lending in Northern Ireland can be restricted in some locations, so widen the net with a broker who specialises in this location and can search the entire market for the buy-to-let mortgage you need. Applying directly to a lender without researching the alternatives could mean you miss out on a cheaper or more flexible deal elsewhere. You might even be able to borrow more on a mortgage if you check your eligibility with a broker, so avoid diving into a long-term contract and compare the market with a qualified professional.
  3. Relax – If you’ve got a broker, they’ll manage your application and be at every step of the process until you’ve completed on your new investment.

Our service includes a recommendation to a mortgage broker based on their experience, qualifications and real customer reviews – so you know that when we suggest an expert, it’s because we have faith in them that they can deliver.

We listen and learn about your situation and match you with an FCA regulated mortgage broker, never compromising our standards for accurate and reliable financial advice. Make an enquiry to get started.

How do you find the best lender?

These days, there’s so much information online and so many lenders to choose from, it’s hard to really know who has the best deal.

Choosing the right lender all depends on what matters most to you.

For example:

  • Do you want a lender who offers mortgages with a low deposit?
  • Are you looking for a fixed interest rate deal, discounted rate or, perhaps even a tracker rate?
  • Which lenders can help people with adverse credit on their record?
  • Do you know if a particular deal you’re interested in is available to you?
  • What about arrangement fees and other charges?

Whilst comparison sites set out to make things a little easier, trimming the time needed to compare at a glance, not all lenders are listed and some only provide their deals to intermediaries like mortgage brokers.

If you’d rather find a mortgage deal efficiently and without the uncertainty that comes with wading through hundreds of agreements yourself, ask us to put you in touch with a mortgage broker who specialises in the Northern Ireland market and knows where to look and how to secure you the right mortgage first time.

How much deposit will you need?

The usual starting point for buy-to-let mortgages is normally a deposit of between 20%-25%. Higher deposits mean you’ll have a greater pool of lenders to choose from, which subsequently means you can choose from the lowest rate.

CCJs, IVAs and even a missed payment on an electric bill can have an affect on the amount of deposit you might need. There are specialist lenders who can deal with adverse credit issues, but they will tend to have tighter lending criteria and higher deposit requirements.

Low deposit buy-to-let mortgages do exist and a mortgage broker may be able to find you such an agreement, depending on your circumstances. Look at your finances, get advice from a buy-to-let mortgage broker, find out how much deposit you need and go from there.

How much rental income will you need?

Lenders in Northern Ireland and the rest of the UK both usually need the rental income to be 25–30% higher than the mortgage payment.

This is why the location and type of properties you look at can be so important, as they can be big factors in the rental yield you can make. The higher the yield, the more confident a lender will be when assessing your application.

So, don’t discount particular properties such as student flats, for example, which can prove to be quite lucrative, in terms of rental income, if they’re located in a good area close to a college or university

Limited company buy to let mortgages

Following recent changes made by HMRC, landlords can’t deduct mortgage expenses from rental income to reduce their tax bill but if the property is purchased through a limited company rather than in an individual’s name, a landlord could benefit from declaring their rental income after deducting the cost of the mortgage.

Mortgage rates for businesses can sometimes be higher than for private landlords and that could cost more than any savings made through tax. If you’d like to know more about how a limited company can apply for a buy-to-let mortgage, have a look at our dedicated article here.

Which areas offer the best rental yields in Northern Ireland?

The pull of the rugged coastline and strong Irish Sea winds are enough to convince any buy-to-let landlord that Hillsborough and Glenarm are worthy of investment but perhaps it’s the bustling draw of Belfast or the prospect of high-rental yields possible in student-friendly towns like Portrush that have caught your attention?

Northern Ireland saw a 7.3% increase in average rental values in September 2021 compared to the same period in 2020, at £705 per month. With more people seeking rental accommodation, the cost of rent has increased for many, providing opportunity for landlords.

And so has the cost of property. As reported by The Belfast Telegraph, the north of Belfast has seen some of the biggest rises in property values, second only to east Belfast.

Wherever you plan to make your next buy-to-let investment is up to you but researching property prices and the average rental income in different areas that appeal to you, is a good place to start.

Zoopla, Rightmove and Propertynews are just a few that could prove helpful to your search.

Take Belfast as an example. The average property price for a 2 bedroom house is £119,427, while the average rent for a property that size is £877 pcm. Based on these figures at the time of writing, the rental yield could equate to 8.8% – which is pretty good.

The profit you make from your BTL investment will vary based on lots of factors including the location, unexpected repairs, market activity and the economy in general but rental yield can provide some indication as to how fruitful a property could be.

How do you calculate the rental yield?

The rental yield calculation provides a percentage that lets you know how profitable your buy-to-let purchase is.

To calculate the rental yield divide the annual rent by the property market value. For example, if your property is worth £300,000 and your annual rental income is £7,200 the rental yield calculation would be:

7,200/300,000=0.024

Multiply this by 100 and the rental yield in this example would be 2.4%.

Keep in mind that as property prices can increase or decrease over time, so can rental yield. That’s why it can be useful to recalculate the rental yield of your BTL investment each year, based on a recent market valuation, so you have a better idea about what to charge for rent, whether to sell or if you could use the equity in that property to buy another.

Get matched with a buy-to-let broker who specialises in Northern Ireland

Getting the right mortgage matters. The wrong agreement with an inappropriate lender could cost you money and restrict your opportunities to exit your agreement without a heavy penalty.

We match you with the right kind of mortgage broker for your situation, so that whoever it is that helps you has the best knowledge and experience of the Northern Ireland market to get the finance you need.

Our broker matching service is free. Fill in some basic details via our contact form or call 0808 189 0463. We’ll arrange a casual chat between you and your appointed BTL mortgage broker so you know what options could be available to you.

If you are happy with the advice you’re given, your broker can locate a lender and check your eligibility thoroughly before ever advising you to go ahead with an application.

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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