Portfolio Mortgages for Landlords
Buy-to-Let properties can appear to be very attractive investments. As tangible assets, they can work out very successfully for many people. If you’re in the market for a portfolio mortgage, we’re on hand to help!
The financial landscape tends to shift and change over the course of time[1]. Therefore, it’s always worth paying attention to how your portfolio of Buy-to-Let properties can best be managed.
Get in touch for a free initial, no-obligation discussion about your portfolio mortgage situation.
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- What is a Buy-to-Let portfolio mortgage?
- Try our Buy-to-Let mortgage calculator!
- Getting started with Buy-to-Let investing
- Key financial strategies
- Tailored advice for different landlord types
- Risk management tips
- Portfolio mortgage lenders for landlords
- Is there a limit on the number of Buy-to-Let properties you can have?
- Mortgage broker for portfolio landlords
What is a Buy-to-Let portfolio mortgage?
A Buy-to-Let portfolio mortgage is a product designed for those landlords who have, or plan to have, two or more properties under their ownership.
Treated as a kind of ‘mortgage account’ by the lender, a portfolio mortgage can incorporate mortgages for a variety of properties.
It’s possible that each property will have varying interest rates across the grouping. The rental income from all the properties and the loan-to-value rates are averaged out. This is so that the total surplus equity can be used in the borrower’s favour when looking to add more properties.
Your Buy to Let Situation
Why you would like a Buy to Let mortgage is unique to you. We approach mortgages for your individual needs.
What types of Buy to Let mortgages are there?
There are a variety of things to consider when looking into a Buy to Let mortgage.
Contact us
The best way to find out if you qualify for a buy to let mortgage is to speak to a mortgage advisor.
Getting started with Buy-to-Let investing
Are you thinking of becoming a portfolio landlord? A Buy-to-Let portfolio mortgage might be your best tool. This type of mortgage allows landlords with two or more properties to manage their loans under one “mortgage account.” It simplifies financial management and helps you leverage equity from your entire portfolio to expand your investments.
- Streamlined management: Consolidate multiple loans into one account.
- Increased borrowing power: Use surplus equity to acquire new properties.
- Risk diversification: Spread risk across various properties.
- Equity: The difference between the property’s market value and the remaining mortgage balance.
- Loan-to-value (LTV): The ratio of your loan amount to the property’s value, expressed as a percentage.
- Surplus equity: The additional borrowing potential within your portfolio based on its collective value.
Key financial strategies
Maximising your Buy-to-Let portfolio starts with understanding how to leverage surplus equity. Here’s a quick example:
Scenario:
You own four properties with a total value of £2M and outstanding loans of £1.4M. With a typical loan-to-value limit of 75%, your borrowing capacity is £1.5M. This leaves £100K of surplus equity, which you could use to buy another property.
- Deposit size matters: A larger deposit means lower risk for lenders, unlocking better rates.
- Maintain a strong credit score: This directly affects your affordability assessments.
- Use a mortgage broker: Some of the best deals aren’t publicly advertised, but brokers have exclusive access.
Speak to our mortgage advisors today for personalised strategies tailored to your financial goals.
Tailored advice for different landlord types
Landlord type |
How a portfolio mortgage can help |
| New landlord | Simplifies the process of acquiring and managing multiple properties. |
| Experienced landlord | Optimises equity to use across larger portfolios, enhancing growth potential. |
| Accidental landlord | Streamlines mortgage management for unplanned rental properties. |
| Property developer | Provides flexible funding to expand and diversify investments. |
No matter your experience level, our team can guide you toward the best mortgage solutions.
Risk management tips
Being a landlord comes with risks, but proactive planning can help. Here are some quick tips:
- Mitigate vacancy risks: Keep a buffer fund to cover periods without rental income.
- Protect against tenant defaults: Consider rent guarantee insurance.
- Plan for maintenance emergencies: Regular inspections and upkeep reduce costly surprises.
Need more advice? Our brokers can help tailor a risk management strategy for your portfolio.
Portfolio mortgage lenders for landlords
Over the recent years, purchasing Buy-to-Let investment properties has become much easier[2]. This is because there have been many lenders opening their services to landlords.
While there are a range of lenders and products, each will come with their own criteria. And the way in which you’re assessed will be different based on the lender.
When assessing you for a mortgage, lenders will look at the following:
- Deposit you are able to supply.
- Amount of equity in your portfolio.
- Your cash flow.
- Size of your portfolio.
- Your experience.
- Size and condition of the property you want to buy.
- Location of the property.
With all these in-depth checks, it can be difficult to know if you are in a good position to apply. If you want to discuss your options, why not get in touch today? Our expert brokers will be able to understand your situation and advise you on the best path to take.
Portfolio mortgage rates are like any mortgage rates, they are always changing [3]. Therefore, finding the best rate for you might not always be straightforward.
To ensure you open yourself up to the best products and rates, keep in mind the following:
- Providing a larger deposit will allow you to access better deals [4]. This is because you are borrowing less money from the lender, so you are a lower risk to them. Therefore, they don’t need to offset this risk by imposing higher rates.
- Mortgage brokers can access exclusive deals you may not be able to. Some lenders don’t advertise all their services to the public [5]. This means that a broker is required to use them. This will open your options further, improving your chances of obtaining a better rate.
- Your credit score is a crucial element of any lender’s affordability assessment, so ensuring it’s at a good level will do you a big favour when applying[6].
Is there a limit on the number of Buy-to-Let properties you can have?
There is no policy or legislation that states the number of properties you can have. Instead, restrictions may be imposed based on your personal circumstances, such as your finances.
Lenders want to minimise their risk of exposure; therefore, may limit how many mortgages you can obtain with them.[7]
As an example, they may only limit one individual to have 5 mortgages with them. They could also set a limit of 10 mortgaged properties in your portfolio between them and other lenders.
Mortgage broker for portfolio landlords
If you’d like to explore the possibilities of a portfolio landlord mortgage, then it’s important that you seek professional, experienced advice.
Our specialist team at The Mortgage Centres has an in-depth knowledge and understanding of every aspect of the mortgage market.
Get in touch today to explore your options and get started on your new mortgage journey.
[1] Bank of England (Updated Quarterly) Monetary Policy Reports (Accessed 12.11.24)
[2] UK Finance (22.10.24) Buy-to-Let Lending (Accessed 12.11.24)
[3] UK Finance (16.12.21) Interest rates and mortgage lending (Accessed 12.11.24)
[4] MoneyHelper (13.05.24) How much deposit do I need for a mortgage? (Accessed 12.11.24)
[5] Intermediary Mortgage Lenders’ Association (IMLA) (28.11.2022) Constitution of the Intermediary Mortgage Lenders’ Association (Accessed 12.11.24)
[6] Experian (n.d.) What credit score do I need for a mortgage? (Accessed 12.11.24)
[7] Bank of England (September 2016) Underwriting standards for buy-to-let mortgage contracts (Accessed 12.11.24)
Phil Scott
Director
About the author
Phil has worked in the financial services industry since 1992, having started with a large insurance company. He went self employed in 1996 as an Independent Financial Adviser before setting up his first company, Needham Market Home Financial in 1999.
After four years, he decided to concentrate solely on mortgages and related insurances, and The Mortgage Centres was born. Since then, Phil has been influential in the opening of several new offices as the business continues to grow.
Qualifications
Financial Planning Certificate: 1,2 & 3
Year Attained: 1992
Certificate in Mortgage Advice and Practice (CEMAP)
Year Attained: 2001
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