Buy To Let Mortgage First Time Buyers

Buy To Let Mortgage First Time Buyers

Are you a first time buyer considering buying an investment property using a mortgage? The information on this page should be helpful.

How do buy to let mortgages work?

A buy to let mortgage is taken to purchase or refinance a property that is let to tenants. For underwriting purposes, along with the sale value, the rental value of the property is assessed which serves as an important figure as this is the main number that determines the maximum loan amount.

The mortgages are unregulated as they are for investment purposes so as not to be let to family members.

The mortgages can be taken on an interest only or repayment basis depending on whether the main objective to the applicant is monthly profit or reduction of the debt.

Many buy to let lenders need you to already own a residential property or another buy to let lender before they agree to lend to you, however, this is not always the case.


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Can first time buyers get a buy to let mortgage?

Although the majority of buy to let lenders will not offer a mortgage on an investment property to a first time buyer, there are some that allow this.

Some that do may have a condition that they will only agree to the buy to let mortgage if they feel that the same application would have passed the affordability assessment if it was done on a residential basis.

For example, if an applicant wanted to buy a property valued at £700,000 with a mortgage of £400,000 but their income was £40,000 per annum, the lenders that use the residential affordability rule would not offer this as it would be 10 x income so would not pass on a residential affordability basis.

There are however other lenders that do not use this assessment and may just have a minimum personal income amount needed, such as £20,000 or £25,000.

These lenders may look at the plausibility of the case to be comfortable that the property will be a buy to let and nothing else. They may look at the applicant’s living status and wish to know why the applicant is planning on buying a buy to let rather than a home to live in.

All lenders assess things differently so take professional advice.

If the property requires work you may require a first time buyer renovation mortgage and you are looking to improve and sell.

Do all buy to let lenders lend to first time buyers?

Not all lenders offer buy to let mortgages to first time buyers. Many need to see that the applicants already have their own home or already let another property so have experience being a landlord.

One reason they do this is because lenders need to reduce the likelihood of a person moving into their buy to let property and feel that if they already have their own home or have already proved themselves as landlords, there would be less chance of the mortgage being used for incorrect purposes. Most applicants are applying for the right reasons, but it does happen so lenders want to protect themselves.

First time buyer houses that have mortgages

Can first time buyers buy an HMO with a mortgage?

An HMO is a house of multiple occupancy. This is a property which has multiple tenancy agreements in place and is let to people from more than one family. For example, this could be a four-bedroom house let to four professionals with four tenancy agreements in place.

HMOs often need specialist mortgage products that allow this type of tenancy. Most HMO lenders will not lend to first time buyers on an HMO as they want the applicants to have experience in the letting of the property before they take on an HMO as this is seen as more work.

The good news is, if you are a first time buyer and have done your research and know that letting out HMO properties is what you want to do as HMOs often generate more profit, some lenders can look to take you on as applicants.

There will be other terms and requirements so find a mortgage adviser with experience in HMO properties who can advise you. I NEED ADVICE can match you with an experienced HMO mortgage adviser if you complete the contact form.

What are the challenges for a first time buyer wanting a buy to let mortgage?

There can be many challenges for a first time buyer looking to get a buy to let mortgage.

One can be the level of deposit needed. As this is often higher than that needed for a residential property, this can be a challenge.

Another is the limited number of lenders that offer buy to let lending to first time buyers. The number of lenders that offer buy to let mortgages to first time buyers is a lot less than the amount offered to existing landlords and people that own their residential properties. This in turn gives you fewer options than perhaps that of a landlord or homeowner.

Another challenge may be your income. As some buy to let lenders that offer first time buyers buy to let mortgages underwrite your application on an affordability basis, if your income is not high enough to pass the residential affordability assessment, some lenders will not offer for buy to let mortgage.

Read more: Can I Get A Buy To Let Mortgage With No Income?

Another factor may be your credit file. Like for a residential mortgage, lenders have criteria on how your credit needs to have been handled in the past to get the buy to let mortgage. Some lenders will have tighter rules than others which may limit your choices.

To view your credit history, you can go to websites such as Experian, Equifax or Check My File.

As there are many things to take into consideration, you should always seek professional advice.

Happy mortgage broker giving free mortgage advice over the phone


Can a first time buyer get a commercial mortgage on a property to rent out?

It may be possible for a first time buyer to get a commercial mortgage on the commercial property if they plan to rent this property out.

Commercial mortgages are complex and bespoke so what your plans are with regards to the rental of the property and how your experience will assist you, are things that will be considered.

Commercial mortgages usually have a higher rate of interest than standard buy to let mortgages and residential mortgages. This is because lenders consider them higher risk due to the properties usually being harder to sell.

if you are thinking about buying a commercial property and need a commercial mortgage to do so, you should talk to a commercial mortgage broker with plenty of experience. The broker will often be a member of the National Association of Commercial Finance Brokers.

If you would like I NEED ADVICE to match you with an experienced commercial mortgage broker, please complete the contact form.


First time buyers can get buy to let mortgages but there is more to look at.

Getting one can depend on many things such as the age of the borrower, their income, their credit file, the amount of deposit they have, the property details, the expected rent and more.

Getting professional advice is always important to find a mortgage adviser that has plenty of experience in buying to let mortgages and first-time buyers.

If you would like I NEED ADVICE to match you with an expert mortgage adviser, please complete the contact form.

The information on this page is not tailored to any individual readers and should not be considered financial advice under any circumstances.

If you are seeking advice about a mortgage, you should consult a qualified professional.

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