Everything You Need to Know About Buy to Let Mortgages

Thinking about investing in rental property? Here’s what you should know before becoming a landlord.

Whether you're planning to grow a property portfolio or simply looking to earn extra income from a second home, a Buy to Let mortgage could help you get started. But these mortgages work differently from standard residential loans.

At Endurance Mortgages, we help new and experienced landlords understand what’s involved and how to make a smart investment. Here’s your complete guide to Buy to Let mortgages in 2025.

What Is a Buy to Let Mortgage?

A Buy to Let mortgage is a loan designed for people who want to buy property to rent out rather than live in. The key difference? Lenders assess the deal based on how much rental income the property can generate - not just your personal salary.

You'll usually need:

• A larger deposit, often 20–25%

• A good credit history

• A projected rental income that covers 125–145% of the mortgage payment

Buy to Let mortgages are typically interest-only, meaning you only pay the interest each month and repay the loan in full at the end of the term.

Who Can Get a Buy to Let Mortgage?

Buy to Let mortgages are open to:

• First-time investors

• Experienced landlords

• Self-employed applicants

• Limited companies (for portfolio landlords)

That said, lenders may have restrictions. Some require a minimum income, usually £25,000+, or limit how many Buy to Let properties you can own.

We can help you find a lender that suits your goals, whether you’re buying your first rental or expanding a portfolio.

What Are the Costs?

Aside from your deposit, Buy to Let mortgages come with other expenses, including:

• Higher interest rates than residential mortgages

• Stamp Duty Land Tax (with a 5% surcharge on additional properties)

• Lettings agent fees, maintenance costs, and insurance

It’s important to budget not just for the mortgage but also for gaps between tenants or unexpected repairs.

How Much Can You Borrow?

Your borrowing limit depends on the rental income the property is expected to bring in. Most lenders want the rent to exceed the mortgage payments by at least 25–45%.

As an example:

• Monthly mortgage payment: £800

• Required rent: £1,000–£1,160 (depending on lender)

We can help you understand how much you can borrow based on your chosen property and current market rents.

Should You Buy Through a Limited Company?

Some landlords now choose to buy properties through a limited company, which can offer tax advantages, especially if you plan to grow a portfolio. However, there are pros and cons.

Pros:

• Potentially lower tax on profits

• No personal income tax on rent

• Easier to separate personal and business finances

Cons:

• Higher mortgage rates for company borrowers

• More complex setup and account management

Speak to a tax adviser and mortgage broker before making this decision.

How Endurance Mortgages Can Help

We’ve supported many clients through their first (and fifth) Buy to Let purchase. Our team can:

• Recommend lenders that match your strategy

• Explain your borrowing options based on rental yield

• Guide you through the application from start to finish

Whether you're buying as an individual or through a limited company, we’ll make sure you have everything in place.

Final Thoughts

Buy to Let remains a popular choice for investors, but success starts with the right advice. With rising demand for rental properties, now could be a great time to explore the market.

Key takeaways: ✓ Buy to Let mortgages require a larger deposit and are assessed on rental income ✓ Costs include higher rates, taxes, and landlord expenses ✓ Expert advice is essential, especially if you're new to letting or buying through a company

Ready to explore Buy to Let options? Contact the team at Endurance Mortgages today and let us help you find the right deal.

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Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Some Buy to Let mortgages are not regulated by the Financial Conduct Authority A fee may be charged for mortgage advice. The exact amount will depend on your circumstances.

Endurance Mortgages Ltd is an appointed representative of The Right Mortgage Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales no. 15060351. Registered Address: Worting House, Church Lane, Basingstoke, Hampshire RG23 8PX.