How many buy-to-let mortgages can I have

Nikka Sulton

How many buy-to-let mortgages can I have

People often wonder, “Can I have multiple buy-to-let mortgages?” The answer is yes, but it depends on various factors we’ll discuss in this guide.

The good news is that it’s possible to have more than one mortgage. That being said, not everybody will qualify for a mortgage, let alone multiple mortgages. There are many factors for whether you can have more than one mortgage which we’ll explain in this guide. We’ll also look at ways to increase your chances of having multiple mortgages.

What Exactly Is A Buy To Let Property?

A buy-to-let mortgage is tailored for property investors and landlords. To acquire a property for rental purposes, you must either pay for it outright or secure a buy-to-let mortgage. This serves as an investment, potentially generating income when tenants rent your property.

However, being a landlord comes with significant responsibilities. Property maintenance and covering certain expenses, such as damages, fall under your purview.

Before buying a property for rental, thorough research is essential. Finances, including property development finance, mortgage rates, taxes, and repayments, need careful consideration. Additionally, your target market, the tenant demographic you aim to attract, plays a crucial role in your decision.

For example, in Liverpool, proximity to universities may make student rentals a viable choice, while others prefer families or young professionals as tenants.

Regardless of whether you plan to build a portfolio of rental properties for income or opt for a single rental, thorough research or consultation with a mortgage broker is paramount.

Is there a limit to the number of buy-to-let mortgages I can have?

While some landlords aim for extensive property portfolios with multiple mortgages, it’s essential to consider various factors. Your ability to do so depends on your financial situation and the specific lender’s policies.

Buy-to-let mortgages are generally viewed as riskier than standard residential mortgages. Lenders often require relevant experience and a proven track record in property investments before considering your application.

If you intend to secure multiple of these riskier mortgages, be prepared for more stringent requirements. You must convincingly demonstrate your ability to manage the repayments for each mortgage.

Typically, most lenders cap the number of buy-to-let mortgages at 2 to 5 per landlord. However, there isn’t a legal restriction preventing an individual from obtaining more buy-to-let mortgages if they meet the lender’s criteria.

Can I have multiple residential mortgages?

Yes, you can have more than one residential mortgage, but it’s essential to designate one as your primary residence. Acquiring a second home typically poses no major issues, but securing a third or fourth residential mortgage can be quite challenging.

Lenders impose restrictions on multiple residential mortgages primarily to prevent illegal subletting. Residential mortgages are often easier to obtain because they require a smaller deposit compared to buy-to-let mortgages.

Additionally, you’ll need a valid reason for seeking a second home. Common justifications include working in a different city to eliminate long commutes or desiring a holiday home for personal leisure.

Does my income determine the number of mortgages I can have?

If you’re purchasing a home for your own residence, your income will determine your borrowing capacity. However, the number of residential mortgages available to you remains limited, with little reason to own more than one or two properties for personal use.

On the other hand, your income is unlikely to impact the number of buy-to-let mortgages you can obtain. Buy-to-let lenders typically assess the expected rental income from your investment rather than your employment income.

For buy-to-let properties, the rental income should cover your mortgage payments. Most lenders require the rental income to be 125%-145% of your mortgage payment.

Can I take out a buy-to-let mortgage with more than one lender?

It varies among lenders.

Certain lenders impose limits on the number of mortgages you can have with different financial institutions. This practice helps them assess your debt and determine if you can manage your mortgage payments effectively.

The maximum number of buy-to-let mortgages you can secure from one lender ranges from 4 to 10, although some lenders may not have specific restrictions on the number of mortgages you can obtain.

How many buy-to-let mortgages can I have?

Several lenders offer buy-to-let portfolio mortgages, but their terms and criteria can differ significantly. Some current providers of buy-to-let portfolio mortgages include:

It’s worth noting that it’s not advisable to approach these lenders directly. Instead, working with a mortgage broker who specializes in portfolio mortgages can provide you with access to a broader range of rates and deals, along with tailored advice to increase your chances of securing the right mortgage for your needs.

Can I Live In My Buy to Let Property?

Living in a property funded by a buy-to-let mortgage breaches mortgage terms set by the Financial Conduct Authority (FCA). These mortgages differ from residential ones and are intended exclusively for letting tenants.

Buy-to-let mortgages are closely tied to the private rented sector, as defined by the Ministry of Housing, Communities, and Local Government. Monthly rental income typically covers mortgage repayments, making the loss of rental income a concern for lenders.

Moreover, buy-to-let mortgages often come with higher interest rates and minimum deposit requirements compared to standard residential mortgages. In summary, attempting to reside in a buy-to-let property financed by such a mortgage is not advisable.