Explore Your
Buying to Let Mortgage Options

One-Time Fees:

• Arrangement Fees: Charged by the lender for setting up the mortgage, typically a percentage of the loan amount or a fixed fee
• Valuation Fees: Charged for assessing the property’s value, essential for the lender to determine the loan amount.
• Legal Fees: Cover the cost of legal services for the mortgage and property purchase.
• Broker Fees (if applicable): If you use a mortgage broker, they’ll charge a fee for their services. At Mortgage.One, we don’t charge our client broker fee as we are paid by the lender.

Ongoing Fees:

• Mortgage Interest: The regular payments to the lender, calculated based on the interest rate and loan amount.
• Company Costs: Setting up and maintaining a limited company incurs ongoing costs like accounting fees, annual company accounts and returns.
• Property Costs: These include insurance, maintenance, repairs, and any service charges or ground rent.

Other Costs (Potentially):

• Stamp Duty Land Tax (SDLT): Payable on the purchase price of the property. A 3% surcharge applies to additional residential properties, regardless of whether the purchase is made by an individual or a limited company. Use our buy-to-let stamp duty calculator for accurate calculations.
• Early Repayment Charges (ERCs): Incurred if you repay the mortgage early, typically during a fixed-rate period.

Company Financials Scrutiny:

Lenders thoroughly assess the limited company’s financial health, including its accounts, cash flow, and business plan (if applicable). This is crucial to gauge the company’s ability to repay the mortgage and manage the property investment.

Personal Guarantees:

Most lenders require personal guarantees from the company’s directors and/or shareholders, making them personally liable if the company defaults. This necessitates a thorough assessment of their personal finances, including income, assets, and liabilities.

Stress Testing:

Lenders apply stress tests to assess whether the rental income can cover mortgage payments even with interest rate fluctuations or vacancy periods. The stress test for limited companies is typically 125% (rental income should cover 125% of the mortgage interest), lower than the 145% applied to individual borrowers.

Experience and Expertise:

Lenders may assess the directors’ experience and expertise in property management, particularly for multi-let properties like HMOs, student lets, or short-term lets like holiday lets and Airbnb, which demand more hands-on involvement.

Portfolio Landlords:

For companies owning four or more buy-to-let properties, lenders evaluate overall portfolio performance, including rental income, vacancy rates, and expenses to assess financial stability and risk.

Legal Structure:

Lenders review the company’s legal structure and documentation for compliance. Some lenders might not consider SPVs owned by a holding company instead of individual shareholders.

Factors Affecting the Timeline:

• Complexity of the application: Complex financial situations, multiple properties, or trading limited companies with existing businesses may take longer.
• Lender’s workload: Each lender has different processing times, and delays can occur during peak periods.
• Applicant’s responsiveness: Quickly providing all required documentation speeds up the process considerably.
• Property valuation and legal work: These external factors can also impact the overall timeline.

General Timeline (Estimate):

• Initial Inquiry and Agreement in Principle (AIP): A few hours to a few days.
• Formal Application and Document Submission: 1-2 weeks.
• Underwriting and Valuation and Document Submission: 2-4 weeks.
• Mortgage Offer: A few days.
• Legal Work and Completion: 4-8 weeks.