Buy-to-Let Options for First-Time Landlords
Becoming a landlord for the first time can feel like stepping into a whole new world — one with its own rules, terms, and financial checks. The good news? You don’t need to be a property mogul to get started.
At Mortgage Bridge, we work with plenty of first-time landlords who are buying their very first rental property. Whether you’re investing for extra income or thinking long-term, understanding your buy-to-let mortgage options is the key to doing it right from the start.
Let’s explore how buy-to-let mortgages work, what lenders look for, and how to make sure your first property investment is a success.
What Is a Buy-to-Let Mortgage and How Does It Work?
A buy-to-let mortgage is designed for properties you plan to rent out rather than live in. The main difference from a residential mortgage is how lenders assess affordability.
Instead of basing your borrowing on your personal income alone, they look primarily at the property’s rental potential — how much rent it can generate compared with the mortgage payments.
Most buy-to-let mortgages are interest-only, meaning you only pay the interest each month, not the capital. That keeps payments lower and can make it easier to manage cash flow. When the mortgage term ends (or when you sell the property), you repay the full loan amount.
If you prefer stability, you can also choose a repayment mortgage — you’ll pay both interest and capital each month, gradually owning more of the property over time.
We’ll help you explore both routes to see what works best for your goals and budget.
Can First-Time Buyers Get a Buy-to-Let Mortgage?
Yes — although it can be trickier.
Some lenders prefer borrowers who already own a home, but there are plenty of specialist buy-to-let lenders who will consider first-time buyers or first-time landlords. They’ll just want to see that you can manage the responsibilities and have strong enough finances to back it up.
Typically, they’ll check:
- Your income and employment stability
- Your credit history
- Your deposit (usually at least 25%)
- The expected rental income
If you’re still renting yourself or don’t yet own a property, we’ll guide you to lenders open to first-time buyer buy-to-let mortgages. These can be perfect if you’re looking to invest before buying your own home.
How Much Deposit Do I Need as a First-Time Landlord?
For most buy-to-let mortgages, you’ll need a minimum deposit of 25%, though some lenders go as low as 20%.
Putting down more — say 30% or 40% — usually means lower interest rates and higher borrowing power.
Your deposit can come from savings, equity release from another property, or even a gifted contribution (if allowed by the lender).
We’ll help you calculate what’s realistic for your first investment, including how much rental income your chosen property would need to generate to meet lender affordability tests.
How Much Can I Borrow on a Buy-to-Let Mortgage?
The amount you can borrow depends mainly on your rental income.
Most lenders expect the rent to cover between 125% and 145% of your monthly mortgage interest payments — known as the rental coverage ratio.
For example, if your mortgage interest costs £800 a month, lenders may want your rental income to be at least £1,000–£1,160.
Your personal income can also help, especially if you’re slightly short on rental coverage. This is known as “top-slicing”, where part of your personal earnings helps boost affordability.
We’ll work out both your rental and personal affordability before applying, so you know exactly what your borrowing range looks like.
What Mortgage Types Are Available for First-Time Landlords?
There’s no one-size-fits-all when it comes to buy-to-let mortgages — the best option depends on your goals, risk tolerance, and financial setup.
Here are the main types:
Fixed-Rate Buy-to-Let Mortgages
Your interest rate stays the same for a set period (usually 2, 3, or 5 years). This makes budgeting easy and protects you from rate rises.
Tracker Buy-to-Let Mortgages
These move in line with the Bank of England base rate. They can start cheaper but fluctuate — ideal if you’re comfortable with some risk.
Variable-Rate Buy-to-Let Mortgages
Your rate can go up or down depending on your lender’s standard rate. They’re flexible but less predictable.
Limited Company Buy-to-Let Mortgages
If you plan to grow your portfolio, buying through a limited company (SPV) can offer tax advantages. Lenders assess affordability differently for company-owned properties, sometimes allowing higher borrowing levels.
We’ll talk you through each option to help you choose a setup that fits both your first property and your long-term plans.
What Are the Pros and Cons of Buy-to-Let for First-Time Landlords?
Like any investment, there are benefits and risks. Knowing both helps you make informed decisions.
Pros:
- Potential for regular rental income
- Long-term capital growth as property values rise
- Tax-deductible expenses (e.g., letting agent fees, maintenance)
- Flexibility to build a future property portfolio
Cons:
- You’ll need a larger deposit than a residential mortgage
- There may be periods without tenants (voids)
- Interest rates and stamp duty are higher for buy-to-lets
- Property values can fluctuate
We always make sure our clients understand the full picture before they commit — so you go in confident, not cautious.
How Do Lenders Assess First-Time Landlord Applications?
Lenders look at two main areas: you and the property.
For you, they’ll check:
- Income stability and affordability
- Credit history and existing commitments
- Experience with property (not essential but helps)
For the property, they’ll assess:
- Location and rental demand
- Market rent via a valuer’s report
- Property condition and type (flats, HMOs, or houses)
Some lenders avoid flats above shops or properties needing major work. Others are fine with them. That’s where using a broker like us saves time — we know which lenders match your specific property and profile.
Should I Buy a Property in My Own Name or Through a Limited Company?
Both routes have pros and cons.
Buying in your own name is simpler, with slightly cheaper rates and fewer legal steps. However, you’ll pay income tax on your rental profits.
Buying through a limited company (SPV) can be more tax-efficient for higher-rate taxpayers. Mortgage interest is treated as a business expense, and you pay corporation tax instead of income tax on profits.
Limited company mortgages can cost slightly more in interest and setup fees, but for many landlords, the long-term benefits outweigh that.
If you’re unsure, we’ll help you compare both routes and coordinate with your accountant to choose the structure that best suits your goals.
What Fees and Costs Should I Expect as a New Landlord?
When buying your first rental property, budget for:
- Stamp duty surcharge (currently 3% on top of standard rates)
- Arrangement fees (often £1,000–£2,000)
- Valuation and legal fees
- Letting agent or management fees
- Insurance, maintenance, and safety certificates
We’ll give you a clear cost breakdown upfront so there are no surprises later.
Can I Get a Buy-to-Let Mortgage with Bad Credit?
Yes — even first-time landlords can get a mortgage with credit issues.
Some specialist lenders are open to applicants with defaults, CCJs, or past missed payments, especially if your finances have improved since. You might need a bigger deposit or a slightly higher rate, but it’s still possible.
We work with lenders who look at the full picture, not just your credit score, so we can often find solutions even when high street banks can’t.
What If My Bank Has Already Said No?
Don’t worry — being turned down doesn’t mean the end of the road.
High street lenders tend to have strict criteria, but there are plenty of specialist buy-to-let lenders who take a more flexible view, especially for first-time landlords, self-employed applicants, or those with complex income.
We’ll review your situation, identify where things went wrong, and repackage your case to fit a lender that’s more open to your circumstances.
How Can I Strengthen My First Buy-to-Let Application?
Here are a few tips to boost your chances of approval:
- Save a bigger deposit — 30–40% if possible
- Keep your credit report clean
- Choose a property with strong rental yield potential
- Avoid short-term debt before applying
- Work with an experienced broker (that’s us!)
Even small improvements can make a big difference. We’ll show you exactly what to tweak before submitting your application so it lands strong the first time.
What Happens Once I Get a Buy-to-Let Mortgage Offer?
Once your mortgage is approved, your solicitor will handle the legal side, including searches and contracts.
After completion, you can start advertising the property, finding tenants, and setting up landlord insurance and safety certificates.
If you plan to use a letting agent, they’ll take care of most of this — but we can also recommend trusted partners if you’re going it alone.
Final Thoughts: Starting Your Landlord Journey with Confidence
Becoming a landlord for the first time doesn’t have to be daunting. With the right guidance and preparation, your first buy-to-let can be both profitable and enjoyable.
At Mortgage Bridge, we’ve helped countless first-time landlords take that first confident step — whether it’s choosing the right property, structuring the mortgage, or finding a lender that fits their goals.
If you’re ready to explore your options, we’d love to help.
Let’s talk through what your first buy-to-let could look like and how to make it work for you.