Best Buy-to-Let Mortgages

Read on as we discover the 8 best buy-to-let mortgages available to investors across the UK.

Updated: June 14, 2024
Matt Crabtree

Written By

Matt Crabtree

CompareBanks is reader-supported. When you click through some links on our site, we may earn an affiliate commission. Learn more

Are you looking to make a secure investment for the future? Investing in property is a lucrative venture that can provide success and prosperity for years to come.

You will generate income from the rental market whilst building a property portfolio. What’s not to love?! 

Your first property investment can leave you feeling overwhelmed, however, although obtaining a great buy-to-let mortgage deal can relieve some of the initial stress. 

In this article, we will explore the best buy-to-let mortgages that the UK has to offer as you embark on your property investment journey.

ProviderScoreDetails
1. Barclays★★★★★Click Here
2. Lloyds Bank★★★★★Click Here
3. Halifax★★★★★Click Here
4. HSBC★★★★Click Here
5. Birmingham Midshires★★★★Click Here
6. Accord Mortgages★★★★Click Here
7. The Mortgage Works★★★★★Click Here
8. Skipton Building Society★★★★★Click Here

What Is a Buy-to-Let Mortgage?

A buy-to-let mortgage is a property loan to purchase an investment property. You can obtain a buy-to-let mortgage on a fixed term or a tracker basis, tailored from 1 year to 5 years.

The lending criteria for this type of loan is much higher than a standard residential mortgage and you could face higher interest rates due to the business nature of the loan.

How Can I Purchase a Buy-to-Let Property?

Purchase a buy-to-let property in the same manner as a residential property, contacting estate agents to view properties and find the best investment. You will still need to pay fees such as solicitor fees and sort out your deposit to buy the house.

The difference comes when you search buy-to-let mortgage deals that offer alternative terms to residential mortgages. 

The mortgage term will be similar to residential mortgages with mortgage repayments stretching from 1 year to 5 years. However, due to the business benefit of rental income and the development of your property portfolio, mortgage rates and monthly payments may be higher.

At a Glance, Buy-to-Let Pros & Cons

So, what are the pros and cons of purchasing a buy-to-let property?

Pros

✔️ Investment — Properties are a secure, low-risk investment and are a much safer investment than some alternatives.

✔️ Property portfolio — Purchasing more than one property builds your own property portfolio.

✔️ Rental income — When letting your property, you will receive a rental income every month.

✔️ Property value — Usually, property values increase over time, developing your investment.

Cons

❌️ Higher interest rates — Buy-to-let property loan interest rates are usually higher than residential mortgages.

❌️ Capital gains tax — When selling an investment property, you will need to pay capital gains tax.

❌️ Tax — As rental income is an income, you will need to pay tax on it.

❌️ Letting agent fees — If you let your investment property out via a letting agent you will pay fees each month.

Best Buy-to-Let Mortgages Compared

Here are the best buy-to-let mortgages available in the UK from a range of specialist lenders and covering sought-after mortgage rates.

1. Barclays Buy-to-Let 5-Year Fixed — Best Overall Deal

Features:

  • Product fee: £1,295
  • Loan to value (LTV): 75%
  • Interest rate: 5.42%
  • Follow-on rate: 9.74% variable
  • Early repayment charge: 2% of the balance

Eligibility:

  • Must be aged 21 years old or over
  • Minimum annual gross income: £25,000
  • Borrow up to £1 million
  • Maximum 6 mortgaged properties with Barclays
  • Maximum 10 mortgaged properties overall with all lenders

Representative example — when borrowing £200,000 for a property worth £300,000 with an interest rate of 5.42%, your monthly repayment will total £1,218.64. 

From this £1,218.64 monthly repayment, £903.33 is interest and £315.31 is deducted from the money borrowed from the lender. 

After the 5-year mortgage has expired, you will have paid £73,118.40 in monthly repayments, of which £54,199.80 is paid in interest and £18,918.60 will be deducted from the original money borrowed.

The Barclays Buy-to-Let 5-Year Fixed deal is a good overall buy-to-let mortgage, offering a secure fixed rate of 5.42% across 5 years. Each monthly repayment will set you back a total of £1,218.64, with £315.31 of this amount coming off the total amount borrowed from the lender.

After the 5-year deal has expired, you will be automatically transferred to a much higher variable rate of 9.74%, so it is important to switch to a new deal promptly.

There is an early repayment charge of 2% payable with this deal. This means that if you want to pay a remaining balance of £200,000 earlier than planned, you will pay 2% of £200,000 as an early repayment fee. In this example, your early repayment fee will total £4,000.

To be eligible for this mortgage deal, you must be aged at least 21 years old and your annual gross income must equate to at least £25,000. You are allowed to have up to 6 mortgaged properties with Barclays to secure this deal, or 10 mortgaged properties across all lenders.

Additionally, your loan-to-value (LTV) amount of 75% must be attained. This means that you cannot borrow more than 75% of the property value.

2. Lloyds Bank Club Lloyds 5-Year Buy-to-Let — Best Current Account Holders

Features:

  • Product fee: £0
  • Loan to value (LTV): 70%
  • Interest rate: 4.97%
  • Follow-on rate: 9.59% variable
  • Early repayment charge: Up to 5% of the balance

Eligibility:

  • Must be aged 21 years old or over
  • At least one applicant must be a current property owner
  • Borrow up to £1 million
  • Maximum 5 mortgaged properties with Lloyds Bank
  • Maximum 10 mortgaged properties overall with all lenders

Representative example — when borrowing £200,000 for a property worth £300,000 with an interest rate of 4.97%, your monthly repayment will total £1,165.69.

From this £1,165.69 monthly repayment, £828.33 is interest and £337.36 is deducted from the money borrowed from the lender. 

After the 5-year mortgage has expired, you will have paid £69,941.40 in monthly repayments, of which £49,699.80 is paid in interest and £20,241.60 will be deducted from the original money borrowed.

The Club Lloyds 5-Year Buy-to-Let deal from Lloyds Bank offers a low rate of only 4.97% for 5 years. However, this great rate is only available for individuals with a Club Lloyds account which is a bank account that costs £3 per month and offers a series of incentives and benefits.

Furthermore, there is no product fee to pay to save you money on initial costs.

If you choose this buy-to-let deal, you will pay £1,165.69 each month, with £337.36 deducted from the amount borrowed from the lender. After the 5-year deal has expired, however, you will be transferred to a variable rate of 9.59% so it is essential to switch on time.

Early repayment charges can be high, however, depending on how early you want to pay back the money borrowed. Typically, you will be charged 5% of the outstanding balance in the first year of the deal, declining by 1% after every year of the mortgage deal. So, if you want to clear the balance in the final year of the deal, you could only pay a fee of 1% of the balance.

The LTV rate for this deal is slightly lower at 70% which means that you can only borrow up to 70% of the property value.

To apply for this mortgage deal, you must be aged at least 21 years old and at least one applicant must be a property owner at present. You could borrow up to £1 million, subject to status, and you are allowed up to 5 mortgaged properties with Lloyds Bank or 10 in total across all lenders.

3. Halifax 2-Year Buy-to-Let — Best for Short Loan Terms

Features:

  • Product fee: £0
  • Loan to value (LTV): 70%
  • Interest rate: 5.87%
  • Follow-on rate: 9.59% variable
  • Early repayment charge: Up to 2% of the balance

Eligibility:

  • Must be aged 21 years old or over
  • At least one applicant must be a current property owner
  • Borrow up to £1 million
  • Maximum 5 mortgaged properties with Halifax
  • Maximum 10 mortgaged properties overall with all lenders

Representative example — when borrowing £200,000 for a property worth £300,000 with an interest rate of 5.87%, your monthly repayment will total £1,272.76.

From this £1,272.76 monthly repayment, £978.33 is interest and £294.43 is deducted from the money borrowed from the lender. 

After the 2-year mortgage has expired, you will have paid £30,546.24 in monthly repayments, of which £23,479.92 is paid in interest and £7,066.32 will be deducted from the original money borrowed.

The 2-Year Buy-to-Let Halifax deal offers a good rate if you are looking for a short-term buy-to-let mortgage. Perhaps you do not want to commit to a 5-year deal in an ever-changing property market and economic climate?

When applying for this 2-year deal, you will pay zero product fees, saving you a substantial amount of cash. You will pay an interest rate of 5.87%, resulting in a monthly repayment of £1,272.76. Of this amount, £294.43 is deducted from the amount you originally borrowed.

The follow-on rate is currently set at 9.59% variable once the 2-year deal has expired. However, if you decide to repay the money borrowed earlier than planned, you will only pay an early repayment charge of up to 2% of the outstanding balance.

To apply for this mortgage, you must have a 30% deposit ready to invest as the LTV rate is currently 70%. You must be aged at least 21 years old and at least one applicant must currently own a property.

You could borrow up to £1 million, depending on your circumstances. You can have a total of 5 mortgaged properties with Halifax, or a combined amount of 10 across all lenders.

4. HSBC 5-Year Fixed Saver Buy-to-Let — Best for Higher Deposits

Features:

  • Product fee: £0
  • Loan to value (LTV): 60%
  • Interest rate: 5.19%
  • Follow-on rate: 7.60% variable
  • 10% annual overpayment allowance

Eligibility:

  • Must own a home that you live in
  • Earn an annual gross salary of at least £25,000
  • Rental income achievable is 125% of the mortgage payments
  • Your buy-to-let borrowing with HSBC does not surpass £2 million

Representative example — when borrowing £200,000 for a property worth £300,000 with an interest rate of 5.19%, your monthly repayment will total £1,191.43.

From this £1,191.43 monthly repayment, £865.00 is interest and £326.43 is deducted from the money borrowed from the lender. 

After the 5-year mortgage has expired, you will have paid £71,485.80 in monthly repayments, of which £51,900.00 is paid in interest and £19,585.80 will be deducted from the original money borrowed.

The HSBC 5-Year Fixed Saver Buy-to-Let deal offers great rates if you have a larger deposit to invest. Requiring an LTV of 60%, you can only borrow up to 60% of the property value, requiring at least a 40% deposit to secure this mortgage.

There is no product fee to pay, however, saving you some much-needed cash when purchasing your new property. The interest rate charged is 5.19% and you will pay a monthly repayment of £1,191.43, of which £326.43 is deducted from your outstanding balance.

The follow-on interest rate after the 5-year deal is 7.60%, a much lower rate than most other lenders. Furthermore, you can overpay up to 10% of the outstanding balance each year, saving you further cash on early repayment fees.

To be eligible for this deal, you must currently own a property that you live in and you cannot be a portfolio property investor. Additionally, your annual income from employment must total at least £25,000.

To ensure affordability, your rental income should meet 125% of the mortgage repayments, and you cannot borrow more than £2 million in all buy-to-let investments with HSBC.

5. Birmingham Midshires 5-Year Fixed — Best for Lower Interest Rates

Features:

  • Product fee: £3,999
  • Loan to value (LTV): 50%
  • Interest rate: 4.45%
  • Follow-on rate: 9.59% variable
  • Early repayment charges: Up to 5%

Eligibility:

  • At least 12 months of continuous employment
  • Must be aged at least 25 years old

Representative example — when borrowing £200,000 for a property worth £300,000 with an interest rate of 4.45%, your monthly repayment will total £1,106.00.

From this £1,106.00 monthly repayment, £741.67 is interest and £364.33 is deducted from the money borrowed from the lender. 

After the 5-year mortgage has expired, you will have paid £66,360.00 in monthly repayments, of which £44,500.20 is paid in interest and £21,859.80 will be deducted from the original money borrowed.

Birmingham Midshires 5-Year Fixed deal is a buy-to-let with a low-interest rate of 4.45%. This means that you will pay a monthly repayment of £1,106.00, reducing your outstanding balance by £364.33 each month. The follow-on rate after the 5-years expiration is 9.59%.

There is a product fee of £3,999 to pay to secure this deal, although you will pay less money each month in repayments in contrast with most other lenders.

Early repayment fees are charged up to 5%, with each year resulting in a decrease of 1% in fees. So, if there are 2 years left on your deal, you will pay a 2% fee of the outstanding balance.

To be eligible for this loan, you must have a substantial deposit of 50% of the property price as you can only borrow an LTV of 50%. In addition, you must be aged at least 25 years old and be able to evidence at least 12 months of continuous employment.

6. Accord Mortgages 5-Year Fixed — Best for Low Fees

Features:

  • Product fee: £125
  • Loan to value (LTV): 50%
  • Interest rate: 5.44%
  • Follow-on rate: 9.59% variable
  • Early repayment charges: Up to 5%

Eligibility:

  • At least 12 months of continuous employment
  • At least one applicant must own a property

Representative example — when borrowing £200,000 for a property worth £300,000 with an interest rate of 5.44%, your monthly repayment will total £1,221.02.

From this £1,221.02 monthly repayment, £906.67 is interest and £314.35 is deducted from the money borrowed from the lender. 

After the 5-year mortgage has expired, you will have paid £73,261.20 in monthly repayments, of which £54,400.20 is paid in interest and £18,861.00 will be deducted from the original money borrowed.

Accord Mortgages 5-Year Fixed buy-to-let deal is a good option if you want to pay low fees. Your total fees will amount to £125, a fraction of the cost that some lenders charge for their buy-to-let products.

You will receive an interest rate of 5.44% when securing this mortgage, paying a total of £1,221.02 each month. £314.35 of this amount is deducted from your outstanding balance each month. 

The follow-on rate for this deal is 9.59%, however, early repayment charges are paid at 1% for every year left on the deal.

To be eligible for this buy-to-let mortgage, you must be able to show at least 12 months of continuous employment and at least one applicant must already own a property. In addition, you can only borrow up to 50% of the property value with this deal so you must be able to fund a 50% deposit. 

7. The Mortgage Works 5-Year Fixed Remortgage — Best for Buy-to-Let Remortgages

Features:

  • Product fee: 3% of the loan value
  • Free standard valuation
  • Loan to value (LTV): 75%
  • Interest rate: 4.99%
  • Follow-on rate: 8.99% variable
  • Early repayment charges: Up to 5%
  • £400 cashback

Eligibility:

  • Must be at least 21 years old
  • Borrow up to £5 million in your portfolio

Representative example — when borrowing £200,000 for a property worth £300,000 with an interest rate of 4.99%, your monthly repayment will total £1,168.02.

From this £1,168.02 monthly repayment, £831.67 is interest and £336.33 is deducted from the money borrowed from the lender. 

After the 5-year mortgage has expired, you will have paid £70,081.20 in monthly repayments, of which £49,900.20 is paid in interest and £20,179.80 will be deducted from the original money borrowed.

The Mortgage Works 5-Year Fixed deal is a remortgage buy-to-let package. You will receive a free standard valuation and will need to pay a product fee of 3% of the loan value. However, you will receive a cashback of £400 as a superb financial incentive.

With an interest rate of 4.99%, you will pay a monthly repayment of £1,168.02, of which £336.33 will be deducted from your outstanding balance. The follow-on rate for this mortgage is 8.99% variable once the 5-year term has expired.

The loan-to-value percentage of this deal is 75% so you need a deposit of 25% of the property value to secure the deal. To pay the outstanding balance early, you will face an early repayment fee of 5% in the first year. This amount declines each year by 1%.

To be eligible for this buy-to-let mortgage, you must be at least 21 years old and your income will be assessed. However, you can borrow up to £5 million across your total portfolio with this lender.

8. Skipton Building Society 2-Year Tracker — Best for Tracker Buy-to-Let

Features:

  • Product fee: £995
  • Loan to value (LTV): 75%
  • Interest rate: 5.94%
  • Follow-on rate: 6.79% variable
  • Zero early repayment charges

Eligibility:

  • Maximum loan: £1.5 million
  • Maximum 5 mortgaged properties with the lender
  • Maximum 10 mortgaged properties in total with all lenders

Representative example — when borrowing £200,000 for a property worth £300,000 with an interest rate of 5.94%, your monthly repayment will total £1,281.28.

From this £1,281.28 monthly repayment, £990.00 is interest and £178.02 is deducted from the money borrowed from the lender. 

After the 5-year mortgage has expired, you will have paid £76,876.80 in monthly repayments, of which £56,697 is paid in interest and £20,179.80 will be deducted from the original money borrowed.

Skipton Building Society’s 2-Year Tracker buy-to-let mortgage deal is perfect for a tracker option that does not fix you into a contract. If you want a buy-to-let mortgage that you can pay back anytime with zero early repayment fees then this is the deal for you.

You will pay a product fee of £995 whilst paying an interest rate of 5.94%. Each month your repayment will be £1,281.28, of which £178.02 will be deducted from your outstanding balance. After the two year period, however, you will face a follow-on rate of 6.79%.

To apply for this buy-to-let, your maximum loan can reach £1.5 million. However, in total, you can have a maximum of 5 mortgaged properties with the lender, or 10 mortgaged properties across all lenders.

Leading Buy-to-Let Mortgages: The Verdict

When looking for a buy-to-let mortgage, your mortgage application may take into account a minimum and maximum age along with a minimum deposit. Many lenders take into account other mortgages and the total number of properties of portfolio landlords.

Our favourite mortgage for buy-to-let properties is the Barclays 5-Year fix deal, offering a low interest rate and early repayment charge to keep your costs low so you can keep more of your profit.

Related Guides:

FAQs

Can a mortgage adviser help me secure a buy-to-let property?

Can I earn an income from buy-to-let properties?

Will I pay capital gains tax?

Related Articles

Second Home Mortgage: Comparison, Lenders & Rates
Are you interested in purchasing a second home? If you are looking for financing...
Compare Commercial Mortgages in 2024
Whether you are moving to new premises for business purposes or branching out to...
Best Limited Company Buy-to-Let Mortgages
Are you looking to expand your property portfolio and invest in the housing market?...
How to Remortgage With Bad Credit
Remortgaging is a great way to get a better deal on your current mortgage rate....

Mentioned Banks

About Barclays Bank Barclays is a British multinational investment bank and financial services company. It was founded in 1690 and is headquartered in London. Barclays originated...
Learn More
About HSBC Bank HSBC is a British banking and financial services company. It is the largest bank in Europe and the seventh largest bank in the world. The bank originated in Hong Kong...
Learn More
About Lloyds Bank Lloyds Bank is a British retail and commercial bank. One of the ‘Big Four’ clearing banks, it was founded in Birmingham in 1765. It is the largest retail bank...
Learn More
About Halifax Formerly known as Halifax Building Society, Halifax is a British bank. It is named after the town in West Yorkshire where it was founded in 1853 as a building...
Learn More
About The Skipton Building Society was created in 1853. It is the UK's 4th largest building society and has over 1 million members and 100 branches. Its most notable subsidiary is the...
Learn More