Buy-to-Let Lifetime Mortgage

A Comprehensive Look At the Best Buy-to-Let (BTL) Lifetime Mortgage Rates in the UK

Contributors: Nicola Date, Katherine Read. Edited by Rachel Wait & Reviewed by Francis Hui

Everything You Should Know About a Buy-to-Let Lifetime Mortgage. We Share the Basics & the Secrets to Understanding the Different Types of Lifetime Mortgages.

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What’s a Buy-to-Let (BTL) Lifetime Mortgage?

A Complete Guide to Buy-to-Let Lifetime Mortgages

Property is a fantastic investment opportunity that you shouldn’t ignore in Jan 2022!

However, with the wrong advice, what should be an investor’s dream, can quickly become your ultimate nightmare.

Don’t worry! We’re here to be your guide!

The great news is that if you’re a property owner who’s over the age of 55, you could use your current estate to purchase a second one on a buy-to-let basis.

We’ll help you discover:

  • All you need to know about BTL equity release products.
  • The costs involved with BTL.
  • All the terms and conditions you need to be aware of.

As experts in the field of equity release, you’ve come to the right place. We’ve spent countless hours reviewing 100s of plans, and we’ve got all the secrets to share. Discover these right now!

What's a Buy-to-Let Mortgage

What’s a Buy-to-Let Lifetime Mortgage?

Buy-to-let equity release plans allow you to borrow cash to buy a property that you then rent out and collect rental income from. This is instead of paying off your mortgage with monthly payments like you would with a traditional mortgage.

How Do Buy-to-Let Lifetime Plans Work

How Do Buy-to-Let Lifetime Plans Work?

With a buy-to-let lifetime mortgage plan, your plan provider will mainly consider the potential rental income of the estate to assess your capability to borrow when you are purchasing a property. It allows them to decide whether they’ll approve your secured new loan. Most companies require a rental income of between 25-30% more than your mortgage repayments.

Key Features of Buy-to-let Mortgages

5 Key Features of Buy-to-Let Mortgages

BTLs have specific differences from conventional mortgages. Some of these features in Jan 2022 include:

  • Their fees and fixed interest rates3  tend to be higher.

Check out the best lifetime mortgage rates available as of Jan 2022!

  • Their minimum deposit is usually 25% of the property’s value (although it can vary, depending on the lender, between 20-40%).
  • Most BTL lifetime products run on a voluntary repayment basis. It means that instead of the interest rolling up, this partial plan allows you to repay up to a certain percentage of the original money borrowed each year (dependent on the plan provider) with no penalties.
  • The Financial Conduct Authority (FCA) does not regulate most BTL lifetime mortgages. There are some exceptions, however – for example, if you want to let the property to a close family member. These are referred to as a consumer buy-to-let mortgage and are evaluated in the same way as a residential mortgage would be.
  • The advising, planning, lending and governing of consumer BTL mortgages are covered under the same laws as residential mortgages authorised and regulated by the Financial Conduct Authority (FCA).
Who Can Get a Buy-to-Let Mortgage

6 Buy-to-Let Mortgage Criteria

Are you considering the buy-to-let route? Check out these criteria to see if it could be right for you:

  • You have a desire to invest in houses or apartments and you’ve done all the nessecary research.
  • You have the means to cover the expenses of investing in property, including maintenance and unforeseen expenses.
  • You already own property, whether outright or with an outstanding mortgage.
  • Your estate has a minimum cash value of £70,000 and no more than £6 million.
  • Your property is located in either England, Scotland or Wales.
  • You have an excellent credit record and aren’t stretched too much on your other borrowings.
  • You earn cash of £25,000+ a year. If you earn less, you might struggle to get a lender to approve your BTL plan.
  • You’re over 55, but under the age of 90.

Take note: Any other qualification criteria will depend on the plan provider you choose.

What's the Cost of a Buy-to-Let Mortgage

What’s the Cost of a Buy-to-Let Mortgage?

The cost of a buy-to-let mortgage is between £1,500-£3,500. These costs include financial adviser fees, arrangement fees, solicitor fees, and property valuation fees.

Discover: The Costs of Equity Release in Jan 2022

How Much Can You Borrow with the Buy-to-Let Lifetime Mortgage Plan

How Much Can You Borrow with the Buy-to-Let Lifetime Mortgage Plan?

The amount you borrow with a buy-to-let lifetime mortgage depends on your circumstances, property portfolio, and your plan provider. As per most equity release companies, the amount you can borrow depends on your age (must be 55 or older), your property value (minimum £70,000), and the condition of your health.

Try our free lifetime mortgage calculator!

To give you an estimate, you can get a sum between 20% and 50% of the equity in your residence.

Can I Buy-to-Let With a Bad Credit Score?

Whether you can qualify for a buy-to-let lifetime mortgage with a bad credit score will depend on your lender. You may find it harder to get accepted, but with the right specialist advice, you could qualify for a buy-to-let lifetime mortgage, despite your history of bad credit.

In Conclusion

Real estate is the most assured investment, and thus, buy-to-let plans were designed to help you enjoy financial freedom in your retirement and enjoy the benefits that come with owning a buy-to-let property.

Looking for a different type of mortgage? Discover the 2 main types of equity release available in Jan 2022.

What are you waiting for?

Find your financial adviser right now and let them walk you through the application process. After all, knowledge is power!

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
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Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
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Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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