Your guide to buy to let mortgages
NatWest mortgages are available to over 18s. Your property may be repossessed if you do not keep up repayments on your mortgage.
How do buy to let mortgages work?
Mortgages for rental properties are based on rental income, and lenders will typically look for this to be at least 125% of the monthly repayments on your mortgage.
This is called the Interest Coverage Ratio (ICR) and looks at whether your income will cover the mortgage payments, running and insurance costs of the property, as well as letting agent fees.
When considering a buy to let mortgage, you should make sure you understand the other costs such as valuation fees.
Find out about the responsibilities that come with letting a property:
Gas Safety and Energy Performance Certificate
You must be able to provide your tenants with up to date certificates and have all gas appliances serviced regularly, usually once a year.
Managing the property
You could use an agency or manage the property yourself, but either way remember that tenants' deposits need to be held by a third party under the Tenancy Deposit Protection scheme.
The scheme is compulsory, and can help resolve any issues between you and your tenants.
Maintenance and redecoration
Make sure you take into account any work you'll need to do before you rent the property out, from a lick of paint to updating the kitchen.
Remember that you could get hit by unexpected costs such as a broken washing machine.
You'll have to pay Income Tax on your rental income, after deducting your day-to-day running expenses.
You'll also have to pay Capital Gains Tax on any profits over a certain threshold if you sell the property. You can get more information on gov.uk
When your property is empty
Your property could be empty in between tenants, so you'll need to make sure you can still pay your mortgage during this time.
Top questions when considering a buy to let mortgage
Assuming you own another property, Stamp Duty Land Tax (SDLT) for buy to let properties is an extra 3% on top of the current rate bands for properties above £40,000. You may need to factor this in when budgeting.
Get an Agreement in Principle
With an Agreement in Principle, you’ll find out how much you could borrow. This puts you in an ideal place to start your search for a buy to let property.
Get a personalised answer in 5 to 15 minutes
No impact on your credit file
Next step: browse our mortgages and apply
Need some help?
We're on hand to arrange a phone or branch appointment with one of our qualified mortgage advisers. We can also help with any general queries about the process.
Call us on 0800 096 9527
Customers with hearing and speech impairments can contact us by using our Minicom number 0800 027 1396.
Arrange a callback
Complete our quick form to arrange a callback at a time that suits you, including evenings and weekends.
This will allow you to arrange a phone or branch appointment with a qualified mortgage adviser.