Life Moments

Buy to let

How do buy to let mortgages work?

Mortgages for rental properties are based on rental income, and lenders will typically look for this to be at least 125% of the loan. This is called the Interest Coverage Ratio (ICR) and looks at whether your income will cover the mortgage payments, running and insurance costs of the property, as well as letting agent fees.

When considering a buy to let mortgage, you should make sure you understand the other costs such as valuation fees.

Get a mortgage

A buy to let mortgage will normally require a higher deposit for example 25% or more. You can use our tools to see how much you might be able to borrow and what products might work for you.
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Find out how much you could borrow

See how much we could lend you with an Agreement in Principle. It won't affect your credit score as we use a soft credit check.
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Take a look at our mortgages

Check out our buy to let mortgages to see what could work for you. Royal Bank of Scotland mortgages available to over 18s.

The home buying process

Once you've found out how much you could borrow for your buy to let mortgage, you can use our guide to navigate the rest of the home buying process.

When you have your rental property, remember to keep on top of your legal obligations as a landlord and find out what taxes you'll need to pay.

Landlord's checklist

Find out about the responsibilities that come with letting a property:

  1. 1

    Gas Safety and Energy Performance Certificate

    You must be able to provide your tenants with up to date certificates and have all gas appliances serviced regularly, usually once a year.

  2. 2

    Make sure you have insurance

    For any mortgage you must have buildings insurance. It can pay to shop around to find the right policy for you.

    You can also choose to take out landlord insurance, but it's not compulsory.

  3. 3

    Managing the property

    You could use an agency or manage the property yourself, but either way remember that tenants' deposits need to be held by a third party under the Tenancy Deposit Protection scheme.

    The scheme is compulsory, and can help resolve any issues between you and your tenants.

  4. 4

    Maintenance and redecoration

    Make sure you take into account any work you'll need to do before you rent the property out, from a lick of paint to updating the kitchen.

    Remember that you could get hit by unexpected costs such as a broken washing machine.

  5. 5

    Paying tax

    You'll have to pay Income Tax on your rental income, after deducting your day-to-day running expenses. 

    You'll also have to pay Capital Gains Tax on any profits over a certain threshold if you sell the property. You can get more information on gov.uk

  6. 6

    When your property is empty

    Your property could be empty in between tenants, so you'll need to make sure you can still pay your mortgage during this time.

  7. 7

    Reduce risks associated with letting a property

    You should be aware of potential risks and specific features of the private rental sector to help protect you and your tenants.

    There is information available to help you understand your rights and responsibilities, and the Residential Landlords' Association has published various guides and documents. These guides cover things like setting up a tenancy, data protection, tax, benefits and payments. 

Revamp your rental property

For redecorating a house or a flat a loan could help. Representative 3.4% APR available on loans between £7,500 and £19,950.

Other loan amounts are available at alternative rates. Our rates depend on your circumstances and loan amount and may differ from the representative APR.

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