A buy-to-let mortgage is a mortgage intended for a property purchase that is bought for renting out to tenants instead of being used as a personal residence.

You are a landlord when you rent out your property. As a landlord, you will be looking at charging a rent to cover the expenses such as mortgage payments and property maintenance. In addition to covering these expenses, there is potential to earn profits too.

Types of landlord?

Yes, it may seem a little odd to say that there are types of landlords, but when its a buy-to-let mortgage and the way you obtained it, will determine the type of landlord you are.

If you bought a property with the intention to let it out (rent it out), your mortgage is classed as a business loan, not regulated by the Financial Conduct Authority (FCA). That’s because you’re seen as a professional who needs less protection.

A Portfolio Landlord  

Would mean you own 4 or more properties. However, if you seek to make more property purchases, you may encounter limitations in your selection of mortgages. Lenders consider an increased number of properties to be associated with greater business risk.

Accidental Landlord 

Means you decided to let out your property as a result of circumstance rather than design. 

For instance, you may be relocating for work, inheriting a property, or moving in with a partner. In such situations, your mortgage application will receive protection from the FCA and be subject to the same regulations as a conventional mortgage.

Buy-to-let mortgages are generally pricier than residential loans, and some lenders may not provide mortgages for high priced properties. 

You can conduct your own search for buy-to-let offers, or enlist the help of a mortgage adviser to identify the most suitable product for your needs. 

The most economical loans are often exclusively made available through brokers, with some charging fees for their services and others not. Therefore, it is important to verify whether or not fees are applicable before making a decision.

Your property may be repossessed if you do not keep up repayments on your mortgage.