Mortgage Insurance Calculators About How it Works
   Back | How it Works
Securing an excellent mortgage offer with Revolution Finance Brokers couldn't be easier
1Get in Touch
Complete a quick form to give us an overview of your mortgage or financing requirements, and we'll provide recommendations about the best opportunities for you.
2Submit Your Application
Once you've chosen your preferred mortgage deal, we'll steer you through the paperwork with comprehensive application management from start to finish.
3Mortgage Completion
Revolution Finance Brokers will finalise the details and enable you to move forward without delay!
   Back | About
   Back | Insurance
   Back | Calculators
   Back | Choose your mortgage type
Choose your mortgage type

Buy to Let Mortgages for First Time Buyers

If you're a buy to let first-time buyer, that becomes more complex because most mainstream lenders require at least a couple of years of landlord experience to consider a new buy to let applicant.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2023-05-09
twitter  linkedin  

Buy to Let Mortgage First Time Buyer Products

Applying for a buy to let mortgage can be a challenge, with thousands of buy to let first-time buyer lenders, products, interest rates and eligibility criteria to contend with!

If you're a first time buyer, that becomes more complex because most mainstream lenders require at least a couple of years of landlord experience to consider a new buy to let first-time buyer applicant.

Revolution can help with professional advice and support as an independent, whole-of-market broker, compiling a strong application matched to the most suitable specialist first time buyer buy to let mortgage UK lenders.

Please read on for more information about buy to let mortgages for first-time buyers, or give us a call on 0330 304 3040 for assistance from our buy to let first-time buyer experts.

We are also available at [email protected] or via the contact form.

Is it Possible to Get a First Time Buyer Buy to Let Mortgage UK?

It is, yes - although many mortgage lenders are reluctant to offer a first time buyer buy to let mortgage UK, it is possible to apply successfully.

The risk is higher (because the buy to let first-time buyer lender can't check that you have managed mortgage repayments or rental property before). So, although there should be a suitable product out there, you may need to pay a higher deposit and demonstrate a higher rental yield.

AboutAbout your mortgage
Single or joint mortgage?
What’s your yearly income?

Error: Yearly income income must be between £1 and £10,000,000.

Do you receive a regular bonus?

Error: Regular bonus must be between £1 and £10,000,000.

about your mortgage

Based on your yearly income,
you may be able to borrow

image
£0

Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

image
£0

Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

image
£0

Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

Discover What Our Customers Have to Say!
Why Revolution Brokers?

Whole of market brokers Whole of market brokers

Mortgage that suits you Mortgage that suits you

On time customer support On time customer support

What Lender Criteria Apply to a Buy to Let Mortgage First Time Buyer Applicant?

Lender criteria always vary across the market, and the rules might be a little stricter if you're a buy to let first-time buyer and haven't owned any residential or rental assets before.

However, specialist and niche buy to let mortgage first time buyer lenders will likely be able to help.

Most buy to let first-time buyer lenders will look for:

  • A sizable deposit usually of at least 25% of the property value.
  • Good income to meet the buy to let first-time buyer affordability metrics.
  • Your age - normally, you need to be 18+ and below retirement age.
  • A respectable credit rating and a history of responsible financial management.
  • Employment details - PAYE employment on a permanent contract is the best option.

Note that these are general criteria, and not meeting one doesn't necessarily mean you won't qualify for a competitive first time buyer buy to let mortgage UK!

However, it does increase the importance of working with an independent broker to negotiate terms on your behalf and match you with the most appropriate buy to let first-time buyer lender.

Can First Time Buyers Get a Buy to Let Mortgage as an Interest Only Deal?

The vast majority of buy to let mortgages are paid on an interest-only basis.

Each month you pay solely the interest owing on the first time buyer buy to let mortgage UK without chipping away at the capital balance originally borrowed on the buy to let first-time buyer mortgage to buy the property.

You must have a plan to repay the loan when the term ends, usually called a repayment vehicle or an exit strategy.

Most buy to let first-time buyer applicants will plan to either remortgage and keep the rental asset or sell it for a profit, using the proceeds to pay back the loan.

How Do Lenders Assess a Buy to Let Mortgage First Time Buyer Application?

Buy to let mortgage first time buyer lenders use different assessment processes than you would find in a residential mortgage application.

The buy to let first-time buyer lender will need to know when the rental earnings potential is and show that the income will be more than sufficient to cover the mortgage costs.

If you're a first-time buyer, a buy to let mortgage for first time buyers UK lender will also focus on your personal income and ensure you have the means to cover the payments if your rental property is vacant.

Therefore, the process feels like a double assessment - you'll need to meet both residential and buy to let first-time buyer mortgage requirements!

What Paperwork Do I Need to Get a First Time Buyer Buy to Let Mortgage UK?

The biggest challenge as a buy to let first-time buyer mortgage applicant is that you don't have a history of keeping up with mortgage payments, which makes the lender's risk higher.

If you provide comprehensive documentation with your application, it can help assure the buy to let first-time buyer lender that you are a viable applicant - including:

  • Landlord references if you currently rent your property.
  • A full address history of three years or more.
  • Wage slips to prove your annual income.
  • Six months of bank statements to verify your financial standing.

Your selected buy to let first-time buyer lender will also need to check whether the forecast rental income is viable. They usually need to see a rental income of at least 125% of the mortgage interest, or 145% or higher if you're a higher or additional rate taxpayer.

For example, if you are applying for a buy to let first-time buyer mortgage on an interest-only basis that costs £500 a month, the lender will need to see documents that show the rent will be at least £725 per month.

The best way to do this is to request a rental evaluation from the local lettings agent, although you can also research similar properties in the area to gain a ballpark idea.

Can First Time Buyers Get a Buy to Let Mortgage on Any Income?

Possibly - buy to let mortgage first time buyer lenders will always want to check your financial position before they offer a product.

However, in buy to let mortgages, the primary factor is the rental income you expect to receive from the property. If you can show estimates (or rental income valuations from a local agent) that far surpass the monthly interest costs, your personal income as a buy to let first-time buyer may become less important.

The lender will usually calculate four or perhaps 4.5 times your annual income on a residential mortgage - that figure is the maximum they will lend.

For buy to let first-time buyer mortgages, the lender may ask for a minimum annual income, separately from the rental earnings - this could be £25,000 or thereabouts as a rough indication.

Although your salary isn't always crucial, buy to let mortgage first time buyer lenders have to ensure they lend responsibly and check that you can afford the debt, so they will normally ask for rental projections and personal income details.

What is the Deposit Difference Between a Standard Buy to Let and a Buy to Let Mortgage for First Time Buyers UK?

Standard buy to let mortgage products normally require at least 15% as a deposit, calculated against the home's purchase value.

Lenders can request more and may determine that they will need 20% or 25% as a deposit to accept the risk of lending to a buy to let first-time buyer against a buy to let property.

We explore some of the ways to boost your deposit value below or can advise which buy to let mortgage first time buyer lenders are most likely to accept your application if you have a low deposit value.

Which Buy to Let Mortgage First Time Buyer Products Am I Eligible For?

If you're worried about buy to let mortgage first time buyer eligibility, there are several ways to boost your affordability or secure a buy to let mortgage, even if you fall outside the generic qualification criteria as a buy to let first-time buyer.

Examples could include:

  • Guarantor mortgages mean that a guarantor backs up your application and agrees to make any missed payments on your behalf. Some buy to let first-time buyer lenders will accept a lower deposit in respect of the reduced risk. The guarantor doesn't own a share of the property but does feature on the title documents.
  • Joint borrower, sole proprietor mortgages - most common where a parent or member of your family helps with the financial cost of investing in a buy to let without requiring any ownership.

Please get in touch if you'd like further advice about either of these options or other buy to let first-time buyer mortgage structures that might strengthen your buy to let application as a first-time buyer.

Can First Time Buyers Get a Buy to Let Mortgage With Bad Credit?

Being a buy to let mortgage first time buyer does put you into a less conventional category since most lenders prefer landlords to have at least two or three years of experience to lend.

You almost certainly need to work with a broker if you also have adverse credit issues since mainstream banks are highly unlikely to offer buy to let mortgage for first time buyers UK in these circumstances.

Revolution Finance Brokers works with several respected bad credit specialists who will consider buy to let first-time buyer applications in various circumstances.

Can first time buyers get a buy to let mortgage with any lender? Buy to let first-time buyer lenders all have different policies, so their decision will depend on the type of credit issues you've had, when they occurred, and whether you've since settled all of your debts.

Minor credit issues such as a late payment a few years ago probably won't have a tangible impact on the approval process, whereas something more severe such as bankruptcy, will be more of a stumbling block.

Does a Buy to Let Mortgage for First Time Buyers UK Apply if I Plan to Live in the Property?

No, buy to let mortgages are designed for homes where the owner rents the residence to a paying tenant - they need to check the rental earnings and use that to decide whether you make enough to cover the mortgage costs. You cannot use a buy to let mortgage for first time buyers UK on a residential home.

In most cases, living in a buy to let property would mean you breach the buy to let first-time buyer mortgage agreement.

Can I Rent Out a Property Without a First Time Buyer Buy to Let Mortgage UK?

Although it's not technically always illegal to rent out a property without a buy to let mortgage, it's extremely important to ensure you have permission from your buy to let first-time buyer mortgage lender.

The worst-case scenario is that you are found to be in breach of your mortgage agreement on buy to let mortgage for first time buyers UK, you could need to pay back the outstanding mortgage in full, the property is repossessed, or you're even charged with fraud.

Can first time buyers get a buy to let mortgage on a cash purchase? This situation changes if you're a cash buyer or own a property outright since you can do what you like.

However, if you have a mortgage secured on a home and wish to start renting it out, you must inform your lender and switch to a buy to let mortgage for first time buyers UK.

That normally means either seeking consent to let or switching your mortgage to an appropriate buy to let mortgage first time buyer product.

Buy to let first-time buyer mortgages tend to be slightly more expensive than residential loans and have higher deposit requirements, but you aren't permitted to rent out a home on a private mortgage without approval.

Are Buy to Let Mortgage for First Time Buyers UK Products Available Through a Limited Business?

Commercial buy to let mortgage for first time buyers UK for rental properties are available, although it might not make it easier to find a mortgage if you're trying to scour the market independently.

Can first time buyers get a buy to let mortgage easily? Most lenders offering a first time buyer buy to let mortgage UK product will require a fairly extensive amount of information to lend to a newly incorporated business, particularly if the owner hasn't had a mortgage before.

The same underwriting policies apply, so you'd need to find a commercial lender that offers buy to let mortgage for first time buyers UK products to limited businesses with a first-time buyer policy that would consider you eligible.

As a niche buyer on two fronts, it can be tricky to find a competitive buy to let mortgage first time buyer product - an independent, whole-of-market mortgage brokers is an essential support system to ensure you find the right buy to let first-time buyer lender and the best product available.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

twitter  linkedin  
Frequently Asked
Questions

Unfortunately not, Help to Buy equity loans are only available for residential property purchases, and the scheme doesn't apply to rental assets, or a first time buyer buy to let mortgage UK agreement.

The same applies to the Lifetime ISA - although you're still a buy to let first-time buyer, the initiatives are designed to help people get onto the property ladder and buy a home to live in, so they aren't open for landlords.

You can, though, use any savings within an ISA plus interest accrued towards the first time buyer buy to let mortgage UK deposit cost - although you won't get a 25% government top-up.

If you mortgage a residential home as a first-time buyer, you are exempt from Stamp Duty up to £500,000, but this works a little differently if it's an investment property.

The government levies a 3% second homes charge (including buy to let properties), but you won't need to pay this if you haven't owned a previous home unless you are applying for a buy to let mortgage for first time buyers UK.

Can first time buyers get a buy to let mortgage without paying higher stamp duty? You won't benefit from the reduced Stamp Duty rates as a buy to let first-time buyer because the benefit doesn't apply to buy to lets.

Therefore, as a buy to let first-time buyer you will pay the standard of 2% on the value from £125,000 to £250,000, 5% from there up to £925,000 and 10% up to £1.5 million.

Buy to let mortgage for first time buyers UK are widely available, but much less so if you're applying for a buy to let first-time buyer mortgage to purchase a rental property.

There are a few buy to let mortgage first time buyer products on the high street, although it's almost always preferable to apply through a broker who can access more specialist products with more competitive rates and terms.

Many mainstream lenders will automatically reject first time buyer buy to let mortgage UK applicants who haven't owned a property before - a whole-of-market broker will signpost buy to let first-time buyer lenders without such rigid policies.

You can certainly remortgage a residential property loan, refinancing the debt with a buy to let mortgage first time buyer product!

Can first time buyers get a buy to let mortgage on any property? Much depends on the type of property, how you plan to let it out, and your personal circumstances, such as buy to let first-time buyer credit score and debt-to-income ratio. Please get in touch with our specialists for further guidance on getting a first time buyer buy to let mortgage UK.

Further Reading

Explore Explore Our Presence Our Presence

Explore Explore Our Presence Our Presence

Securing an excellent mortgage offer with Revolution Finance
Brokers couldn't be easier:

Revolution Mortgage Brokers:100% 100%
Independent & Whole-of-Market

As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.

Refer, Relax

andget £50get £50
We are proud
members of the:
NACFB
Refer, Relax

FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

Ask the Expert
Mortgage Brokers

Revolution Brokers
What can we help you with today?
Do you have a particular timescale in mind?
Next
Which situation from the below list best matches your requirements? *
Could you tell us the market value of the property?*
Please let us know a rough idea of your yearly income (before tax) for all applicants? *
Back
Next
Primary applicant name *
Contact email address *
Best contact number *
Back
Next