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Self-employed buy to let mortgages


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HomeSelf Employed MortgagesSelf-employed buy to let mortgages

Self-employed buy to let mortgages

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Last reviewed on 9th May 2022

Being self-employed certainly has its benefits but in terms of getting a mortgage, it can make things slightly difficult. The good news is that some lenders have developed a more relaxed approach to lending to the self-employed. This is especially true where buy-to-let mortgages are concerned.

Self-employed buy to let mortgages aren’t as difficult as applicants often seem to think. A structured approach to your mortgage can even secure great mortgage rates.

As lenders have varied criteria, some may request a minimum income or accounts for three years. On the other hand, there are lenders that will approve mortgages with:

  • Only 1 year of accounts
  • No minimum income requirement
  • Zero income for experienced landlords

What is a self-employed buy to let mortgage?

If a self-employed applicant is applying for a buy to let mortgage, then you might hear this term being used. That said, there aren’t any particular buy to let mortgages for the self-employed. The same mortgages are offered to buy to let applicants, irrespective of how they’re employed.

Although there aren’t any differences in the mortgage products being offered, there are certainly differences in how self-employed applicants are assessed. Lenders are typically more cautious when assessing self-employed borrowers in comparison to the employed. This is because of the potential risk of being a business owner.

The good news is that there are lenders more suitable for self-employed applicants. There are also lenders that have no minimum requirements, which can make mortgage approval easier.

Can I get a buy to let mortgage when self-employed?

Buy to let mortgages are possible for the self-employed. Lenders that have zero income requirements can be better suited for directors and sole traders. This is because your income may be tied up within the business.

Even if a self-employed applicant showed just £100 profit on their accounts, lenders will view this as an income. As some lenders have no minimum income requirement, this won’t be an issue. Furthermore, if you’ve already owned buy to let property, lenders will view you as a smaller risk compared to less experienced borrowers. This means that experienced landlords can obtain buy-to-let mortgages without having an income.

The reason lenders agree is because rent will usually cover mortgage payments and leave a monthly profit for the landlord. As a result, lenders don’t need to depend on the income of an applicant in order to repay the mortgage. As the majority of buy to let mortgages are taken out on interest-only rates, monthly mortgage payments can be very low.

How much deposit will I need?

Deposits can be generated from personal savings and gifted deposits. You can also raise a deposit by using the equity from a remortgaged property, but how much deposit do you actually need?

You will in almost all cases need at least a 25% deposit. This is because buy to let deals often start at 75% LTV. Lenders may on some occasions accept slightly lower deposits of 15-20%. Nonetheless, it’s advised to use a higher deposit as you’ll usually secure favourable rates by doing so.

ask a mortgage broker

How much can I borrow if I’m self-employed?

Buy to let lenders rarely use business income to assess how much applicants are able to borrow. What lenders will assess, is the amount of rental income your property can generate. That being said, having a secure income can still improve your mortgage chances.

Lenders will require details of your buy to let, such as the rental income it can achieve. This is because the rental income will need to be between 125% – 145% of the mortgage payments. Some lenders will send their own surveyors to check rental values, whereas others will use valuations from ARLA qualified letting agents.

Use our self-employed calculator here.

Current buy to let mortgage rates

Mortgage rates are constantly changing. As buy to let is essentially an investment, it’s worth shopping around and calculating the most viable deals.

Have a look at our current rates below.

View current buy to let mortgage rates.

Speak to a buy to let mortgage specialist

Our expert mortgage advisors specialise in mortgages for the self-employed. Here are a few reasons to contact us!

  • Access to the whole market – Our advisors aren’t tied to one lender, meaning that they’ll search the entire market for a product that suits you.
  • Exclusive products – Our experts have access to exclusive mortgage products that may not be available elsewhere.
  • Independent – Our advisors will always do what’s best for you, as they are not tied to certain products and companies.
  • Experienced advisors – Our specialists are all experienced, qualified and extremely knowledgeable on self-employed buy-to-let mortgages
  • Specialist advisors – With specialist knowledge in fields such as self-employed mortgages and bad credit mortgages. Even when a mortgage seems unlikely, our advisors are often able to locate approval.

You can make an enquiry below to get started.


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About the author

Mortgage Advisor | More Articles

Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.