For homeowners looking to expand into property investment, securing a buy-to-let mortgage as a first-time landlord can be a smart move. However, while owning a residential property can work in your favour, lenders still have strict criteria to ensure you meet affordability and investment requirements.
Can You Get a Buy-to-Let Mortgage as a First-Time Landlord?
Yes! If you already own a residential property, lenders may view you as less risky than a complete first-time buyer. However, you still need to prove that:
✅ You have sufficient income and affordability to cover mortgage payments.
✅ The rental income meets the lender’s stress test requirements (usually 125-145% of mortgage payments).
✅ You can provide a deposit of at least 20-25% (sometimes more for first-time landlords).
Why Some Lenders Hesitate to Lend to First-Time Landlords
1️⃣ Experience & Risk Management 🏡
Lenders prefer landlords who already have rental experience. Without previous experience, lenders may view you as higher riskbecause:
• You may not understand tenant management and the costs of maintaining a rental property.
• You have no track record of rental income.
• There is a risk you could struggle with multiple mortgage payments.
2️⃣ Concerns Over “Backdoor Residential” Use 🚪
Lenders want to ensure the buy-to-let property is genuinely for investment purposes and not a second home disguised as a rental. Some safeguards they use include:
🔹 Rental stress testing to confirm the property generates enough income.
🔹 Ensuring the mortgage is interest-only (most residential mortgages are repayment).
🔹 Limiting the maximum mortgage to 5 times your income.
3️⃣ Affordability & Financial Commitments 💰
Since you already have a residential mortgage, lenders need to assess:
✅ Your monthly outgoings (including existing mortgage payments).
✅ Your rental income projections (most lenders require at least 125-145% coverage of the mortgage).
✅ Your credit score & overall financial health.
If your existing mortgage is high compared to your income, you may need to reduce debt or show additional savings.
Pros & Cons of Getting a Buy-to-Let Mortgage as a First-Time Landlord
Pros: Why It Can Be a Smart Investment
✅ Leverage Existing Equity – You may be able to use equity from your residential property as part of your deposit.
✅ Potential for Long-Term Growth – Buy-to-let properties can increase in value over time.
✅ Rental Income – A reliable tenant can cover your mortgage payments and provide extra income.
✅ Portfolio Building – Owning a residential property proves mortgage experience, making future applications easier.
Cons: Challenges You’ll Face
🚫 Stricter Mortgage Criteria – First-time landlords face higher deposit requirements and stricter affordability checks.
🚫 Stamp Duty Surcharge – You will pay an extra 3% Stamp Duty surcharge on buy-to-let properties. Seek professional advice to calculate your total costs.
🚫 Limited Mortgage Choices – Not all lenders accept first-time landlords, which may affect your available mortgage rates.
How to Improve Your Chances of Getting a Buy-to-Let Mortgage as a First-Time Landlord
💡 1. Strengthen Your Credit Score & Financial Profile
Lenders will check your credit history—so ensure your finances are in order. If you have any outstanding debts, it’s best to reduce them before applying.
💡 2. Show Proof of Rental Affordability
Lenders typically stress test rental income to ensure it exceeds mortgage payments by 125-145%. If your chosen property doesn’t meet this, you may need a larger deposit.
💡 3. Work with a Specialist Broker
A mortgage broker (like The Landlords Broker) can find lenders who work with first-time landlords and help position your application correctly.
💡 4. Consider a Limited Company Setup
Some first-time landlords buy through a limited company (SPV) for potential tax benefits. However, mortgage rates and fees may be higher. Speak to a tax adviser before deciding.
💡 5. Have a Clear Business Plan
Some lenders may ask for a rental business plan, including:
📌 Projected rental yield & income
📌 Exit strategy (how you’ll grow your portfolio or repay the mortgage)
📌 Property management strategy (who will manage tenants & maintenance)
💡 6. Buy a Property Away from Where You Live
Lenders want to ensure the property isn’t for personal use. Buying a property further from your home or workplace can help confirm genuine rental intent.
💡 7. Don’t Buy a Property You Couldn’t Afford as a Residential Mortgage
If you’re purchasing a buy-to-let property that exceeds what you could afford on a standard residential mortgage, lenders may reject your application due to concerns over affordability.
Final Thoughts: Is Buy-to-Let Right for First-Time Landlords?
If you already own a residential property, getting a buy-to-let mortgage as a first-time landlord is easier than for first-time buyers.However, you’ll still need to meet strict affordability, stress test, and deposit requirements.
📞 Need Help Securing a First-Time Buy-to-Let Mortgage?
At The Landlords Broker, we specialise in helping first-time landlords secure the right mortgage. Contact us today for expert advice and tailored solutions!