What Is The Minimum Income For Buy To Let?

Nikka Sulton

What Is The Minimum Income For Buy To Let?

Contrary to popular belief, it is indeed possible to obtain a mortgage for a Buy to Let investment property even if you possess a low income or lack regular earnings. However, in cases where there’s no steady income, many lenders may request evidence of stocks, investments, or savings to support the application. While some lenders typically impose a minimum income requirement of £25,000, there are numerous alternatives available for individuals falling below this threshold.

No minimum income Buy to Let mortgages are specifically tailored for those without a consistent salary, offering a viable avenue for them to acquire the necessary funds to invest in a property for rental purposes. By facilitating access to mortgage financing without stringent income criteria, these specialized mortgage products cater to a broader spectrum of aspiring property investors, empowering them to embark on their Buy to Let ventures regardless of their income status.

How can I get a buy-to-let with no minimum income?

What is a buy to let mortgage with no minimum income?

In the realm of buy-to-let mortgages, those with no minimum income requirement offer a more inclusive approach, devoid of rigid income thresholds. Certain specialist lenders even entertain the possibility of extending buy-to-let mortgages to individuals with no income whatsoever, under the condition that the applicant is already a homeowner and can present a compelling business case to support their application.

Can you use your rental income to pay your mortgage?

Certainly. While many lenders typically don’t accept potential rental income as proof of affordability, you can still utilize your rental payments to offset your mortgage debt. Lenders may stipulate a surplus yield of around 25% above your mortgage payment, such as charging £1,875 in rent to cover a £1,500 mortgage payment. Additionally, both you and the lender should consider any supplementary costs associated with being a landlord, such as insurance and maintenance fees.

Opting for a Buy to Let mortgage with no minimum income requirement increases the likelihood of rental income being factored into your affordability assessment. Consequently, this mortgage type might better align with your individual financial situation. However, it’s always prudent to seek advice from a qualified financial advisor to ensure that the chosen mortgage aligns with your specific needs and circumstances.

What kinds of income can you use for a Buy to Let mortgage?

Rental income
A pension
Government benefits
Bridging loans
Savings/existing or gifted funds

Please note that not all lenders accept each of these income sources, so it’s crucial to research and select a provider that aligns with your financial situation.

How to prove your income for a Buy to Let mortgage

For individuals without a stable income or traditional employment, proving income for mortgage applications can pose challenges. However, for those primarily reliant on investment properties for income, there are several avenues to explore.

For landlords with less than four properties:

If your sole source of income stems from rental properties and you lack alternative employment or income streams, you can substantiate your earnings by presenting property accounts or your self-assessment tax return.

For landlords with more than four properties:

For portfolio landlords, lenders adopt a distinct approach and may impose restrictions on the number of properties they’re willing to finance. Typically, they set maximum limits for mortgages with them and across all lenders, excluding outright owned properties.

If you’re using a pension

After reaching 55, you have the option to withdraw up to 25% of your pension value tax-free. However, it’s not recommended to do so before this age due to significant tax implications. Proof of funds can be obtained from your pension provider.

If you have a self-invested personal pension (SIPP), you have the flexibility to utilize the entire amount for investment purposes, including acquiring investment properties.

If you’re using benefit income

When applying for a Buy to Let mortgage using benefit income, lenders vary in their acceptance criteria. While some may consider state benefits like disability allowances, others may not. Long-term tax benefits are typically favored over short-term ones such as child tax credits. Consulting with a specialist mortgage broker can help identify lenders best suited to your situation.

Can I take out a Buy to Let mortgage with no minimum income if i have a poor credit history?

Many mortgage providers prefer applicants with a solid credit history, showcasing financial competence and responsible debt management.
However, some lenders consider cases from individuals with less-than-perfect credit profiles.
Factors contributing to a poor credit rating include CCJs, bankruptcy, defaults, excessive hard searches on credit files, IVAs, DMPs, and DROs.
Bad credit may limit mortgage options but doesn’t guarantee loan rejection.
Lenders have diverse eligibility criteria, and numerous companies assess less-than-ideal credit profiles.
We collaborate with a wide array of specialist mortgage providers to secure the most suitable deal based on your circumstances.

Applying for a Buy to Let mortgage with no minimum income

When applying for a Buy to Let mortgage with no minimum income, several factors are considered, including:

Your credit history
Personal details like age, occupation, and address
Property details
Regular income sources for repayments
Other assets that could secure funding if needed

At CLS, we streamline the process for you. Simply provide your details, and we’ll arrange a free consultation to explore your options. We present a range of deals from suitable lenders, guiding you through each for informed decision-making.

We manage the application process, providing regular updates and addressing any queries. With face-to-face advice in Essex and the South East, plus online services nationwide, we’re accessible and committed to assisting you at every stage of your mortgage journey. Feel free to reach out anytime for support or updates on your application’s progress.