7 things to consider before getting a buy to let mortgage

7 things to consider before getting a buy to let mortgage

If done correctly, building up your buy to let portfolio is an excellent way of increasing your annual income. However, it can be a risky investment and it doesn’t always pay off. There are plenty of things to consider before entering into a buy to let scenario, so we’ve put together this brief guide of 7 things to consider before getting a buy to let mortgage. 

Location, location, location 

The old property cliché, but also one of the most important things to consider. Choosing the right location will make or break a buy to let deal. 

Do your research and find out what the rental market’s really like in the area you’re looking at. An area with valuable properties may not be the best for you if people are unwilling to pay the rent associated with it, so weigh in a range of factors. 

Condition of the property 

The property’s condition will be one of the factors mortgage lenders take into account when they decide whether or not you can afford the mortgage. This is due to the fact that the condition will affect the value of the property, and therefore the amount of rent you can charge. 

In short, the better the condition of the property, the more chance you have of getting your mortgage accepted. 

Consider any fees 

If you feel inexperienced or don’t have the time to manage the whole buy to let process, you could hire an agent to do it for you. But nothing in this world is free, so they’ll charge you roughly 15-20% of the rental income to manage the property. 

Despite having to pay an agent fee, it will reduce the amount of time and energy you spend managing the property. 

Remember the tax liabilities  

Once you have secured your buy to let property, there are two types of tax that you will be liable for. These are known as capital gains tax and income tax. 

Capital gains tax – this is the tax you pay on any gains in the value of the property when you sell it. If you’re a basic rate tax payer, capital gains tax on buy to let second property’s is charged at 18% and if you’re a higher or additional rate tax payer it’s charged at 28% 

Income tax – the income you receive from the tenants will be liable for income tax. This should be declared on your Self-Assessment tax return for the tax year it was earned in. This might be taxed at 20%, 40% or 45%, depending on your income tax band. 


Don’t assume your property will always have tenants. There will almost certainly be ‘voids’ when the property is unoccupied or rent isn’t paid and you’ll need to have a financial ‘cushion’ to meet your mortgage payments.  

When you do have rent coming in, use some of it to top up your savings account. You might also need savings for major repair bills. For example, the boiler might break down, or there might be a blocked drain. 

Think long term 

Due to a continuous fluctuation in house prices, people have become reluctant to just buy a house and re-sell it for a quick profit. Instead, until there is market stability, buy to let mortgages play the long game by seeing a regular and profitable return from the rental fees. 

Shop around for a mortgage 

The mortgage interest rate you get is vital. Shop around, get plenty of quotes and make sure you’re getting a competitive rate. When you compare mortgages consider the length of the fixed rate you’ll be getting and the cost of arranging the mortgage, as well as your monthly repayments versus the overall amount you’ll be paying. 

It would be worth talking to a mortgage broker before you take out a buy-to-let mortgage, as they will help you choose the most suitable deal for you. 

PLEASE NOTE: Article written 4th June 2021. Information contained within this article is likely to change and therefore should not be relied upon or form part of any form of decision making without seeking professional advice. * 


Any guidance and/or advice contained within this document is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK. Any technical or regulatory information contained within this document was correct at the time of producing it but as it may be subject to change it should not be exclusively relied upon when making a financial decision. The Financial Conduct Authority does not regulate advice on Buy to Let mortgages.  

Article written: June 2021                                                                                                            060121 MZ000210 

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