Buy to Let Contractor Mortgages
Are You Looking For Buy To Let Mortgages in the UK?
Investment in buy-to-let properties are one of the preferred investment types by novice as well as professional investors. This strategy offers buyers the chance to benefit from growth in both property and rental values, whilst paying out strong yields each month.
Buy-to-let mortgages are used to finance properties in the UK for the purpose of letting them out and earning rental income.
If you’re looking to buy or refinance a buy-to-let property, Contractor Mortgage Solutions is the answer. We offer professional and personalised services for buy-to-let mortgages in the UK.
Buy-to-let mortgage options for contractors
Traditionally, properties funded by buy-to-let mortgages are presented to the market as HMO (houses in multiple occupation), holiday let, or MUFB (multi-unit freehold blocks).
At Contractor Mortgage Solutions, our extensive experience with contractors across all industries allows us to understand your unique working arrangements, whether you operate as a standard Limited Company, Special Purpose Vehicle (SPV), PAYE Contractor or through an Umbrella Company.
This insight enables us to secure competitive buy-to-let mortgages tailored to your true affordability, often with exclusive terms from our close relationships with underwriters. No matter who you are or what you do, we offer financing options based on your day/hourly rate, ensuring you can qualify for your buy to let mortgage.
Buy-to-let mortgage options for contractors
Investing in specialist BTL properties can yield higher returns and offer unique advantages. We offer tailored buy-to-let mortgage solutions for a variety of specialist properties, including:
Houses in Multiple Occupation (HMO)
Properties rented to three or more tenants forming more than one household, sharing common facilities.
Key benefits:
- Higher Rental Yields: Increased rental income due to multiple tenants.
- Demand: Popular in areas with high student or young professional populations.
Multi-unit freehold blocks (MUFB)
Is a single property divided into self-contained units, each with its own entrance, kitchen, and bathroom etc.
Key benefits:
- Higher Rental Income: Multiple units can generate more rental income compared to a single property.
- Diversified Risk: With multiple tenants, the impact of a single vacancy is reduced.
Holiday Lets
Properties rented out to holidaymakers on a short-term basis.
Key benfits:
- High Income Potential: Significant rental income during peak holiday seasons.
- Personal Use: Opportunity to use the property for personal vacations.
- Popularity: Growing market with high demand for quality holiday accommodations.
We Operate Based on Your Day Rate
We specialize in securing mortgages for contractors based on their contract earnings alone.
No tax returns, no accounts
We have helped numerous contractors over the last decade to purchase their first homes and investment properties. We work daily with lenders to offer tailored contractor mortgages rarely found on the High street or Online.
We Operate Based on Your Day Rate
We specialize in securing mortgages for contractors based on their contract earnings alone.
No tax returns, no accounts
We have helped numerous contractors over the last decade to purchase their first homes and investment properties. We work daily with lenders to offer tailored contractor mortgages rarely found on the High street or Online.
Use our Buy to Let mortgage calculator below to get an estimate of how much you can borrow
Property investment made it easy. Find your perfect investment property with favorable mortgage rates. Use our Buy-to-Let Calculator now to estimate purchase price and monthly rental income. Start building your portfolio today!
Please note, this calculator only provides indications of possible borrowings. Contact us for a free bespoke contractor mortgage recommendation.
Ready To Find Your Dream Buy To Let Property?
For Buy to Let, always opt for the option that would be more attractive to your tenants. Don’t let traditional mortgage requirements hold you back. Secure your buy-to-let mortgage based on your day/hourly rate and achieve your homeownership investment goals today with us!
Key considerations for contractors when buying investment property
Several key elements comprise the concept of buy-to-let contractor mortgages:
- Demand for the Area: Is the area currently in demand? Is the demand expected to grow in the long term?
- Demographics: Who currently lives in the area (families, students, young professionals, households with housing allowances)? Is this demographic likely to change soon?
- Affordability and Yield: Will your mortgage enable you to offer affordable rent while achieving the required yield?
- Insurance: Do you have insurance to cover the property, its contents, and the tenants?
Additional considerations include:
- Age Restrictions: Are there age range limits for applicants?
- Income Requirements: Is there a minimum income requirement, typically around £25,000?
- Mortgage Limits: Are there limits on the number of buy-to-let mortgages you can hold?
Based on our experience, these are typical questions lenders ask potential landlords.
Buy-to-let mortgaging process: Less Paperwork, Maximum Results
To secure a new mortgage deal as a contractor, you will typically need to provide a significant amount of documentation. Thanks to our extensive experience, we’ve streamlined this process to minimize paperwork. Simply send us:
- A signed copy of your contract confirming your day or hourly rate
- 3 months of bank statements showing your earnings
- An updated CV with your employment history
- Proof of ID (usually passport, driving license or utility bill)
This efficient approach helps us secure your mortgage with less paperwork than you’d encounter with High Street advisors.
We ensure that, based on your rate, we find the best mortgage product to maximize your borrowing power and reduce your repayments.
Buy-to-let mortgaging process: Less Paperwork, Maximum Results
To secure a new mortgage deal as a contractor, you will typically need to provide a significant amount of documentation. Thanks to our extensive experience, we’ve streamlined this process to minimize paperwork. Simply send us:
- A signed copy of your contract confirming your day or hourly rate
- 3 months of bank statements showing your earnings
- An updated CV with your employment history
- Proof of ID (usually passport, driving license or utility bill)
This efficient approach helps us secure your mortgage with less paperwork than you’d encounter with High Street advisors.
We ensure that, based on your rate, we find the best mortgage product to maximize your borrowing power and reduce your repayments.
Why Contractors Choose Us for Buy-to-let mortgages?
Client testimonials
Fee Jav
Client
Fantastic service from Mo and his team at Contract Mortgage Solutions. They made my remortgage process easy and efficient. A real pleasure to deal with, and I highly recommend them as great mortgage brokers.
Goretty Dias
Client
Mo is extremely professional and has helped me with new and remortgage transactions over the past 3 years. Contract Mortgage Solutions is efficient, communicative, and resolves issues well. Highly recommend!
Layla De Freitas
Client
Mo and his team have provided our mortgage for 7 years, helping us remortgage 3 times. Mo goes above and beyond with in-depth market knowledge and excellent service, even with our changing plans. Thank you!”
FAQ’S
What’s the minimum deposit for a contractor buy-to-let mortgage?
Contractors need at least 25% of the home’s sale price as a deposit. For example, if the purchase price is £200,000, you’d need a minimum deposit of £50,000.
How easy is it to get a buy-to-let mortgage in the UK?
Some criteria are:
Minimum Age: Most lenders require applicants to be at least 21 years old.
Deposit: A minimum deposit of 25% is typically required.
Rental Income Projections: Lenders usually require the projected rental income to cover 125-145% of the mortgage repayments.
What are the other charges you have to pay for buying buy to let property?
When buying your first home in the UK, there are several additional charges to consider beyond the purchase price:
- Stamp Duty Land Tax (SDLT): This is a tax on property purchases.
- Legal Fees: Solicitors or conveyancers handle the legal aspects of the purchase, including searches and contracts. Fees typically range from £500 to £1,500.
- Survey Costs: A survey assesses the property’s condition. Costs vary depending on the survey type, from basic home condition reports to more detailed structural surveys, generally between £300 and £1,000.
- Mortgage Arrangement Fees: Lenders may charge fees for setting up the mortgage, which can range from £0 to £2,000. Some mortgages have no fees or offer to add the cost to the loan.
- Valuation Fees: Lenders usually require a property valuation to approve the mortgage. This fee is often covered by the borrower and can range from £150 to £1,500.
- Insurance: Buildings insurance is mandatory, and contents insurance is recommended. Costs vary based on coverage and property value.
- Land Registry Fees: This fee is for registering the property in your name and varies based on the property’s value, ranging from £40 to £910.
- Ongoing Costs: Don’t forget about ongoing costs like council tax, utilities, and maintenance.
- Lanlord Insurance: Protecting you in case of damage to your property.
It’s essential to budget for these additional costs to ensure a smooth home-buying process.
Is there a minimum repayment to rental income figure?
The higher the rent, the greater your financial security, especially with the recent changes. Investing in rental properties can be addictive; once you own one, you’ll want another.
For your first property, rental income must be at least 25% higher than your mortgage interest repayments, or 125% of the repayment amount. Some lenders now require 135%.
For example, if your mortgage repayment is £800 per month, you need at least £1,000 in rent for 125% or £1,080 for 135%.
How much I can borrow and what will be my monthly payments?
This varies greatly depending on your circumstances—individual lenders use many factors to calculate your borrowing capacity. Use our calculator as a rough guide, but call us for a more accurate figure:
What will by the stamp duty for buy to let mortgage
When investing in property, you’ll need to pay Stamp Duty Land Tax (SDLT) if the property is additional to your main residence. Rates, effective from April 1, 2016, are:
- 3% on the first £125,000
- 5% on the portion up to £250,000
- 8% on the portion up to £925,000
- 13% on the portion up to £1.5 million
- 15% on amounts over £1.5 million
Rental income is also subject to income tax, but you can reduce your tax bill by offsetting costs like repairs, maintenance, insurance, and management fees.
Consulting a specialist tax advisor is advisable for navigating these implications. We can recommend experienced tax advisors if needed.
What will be my mortgage interest rate?
The mortgage interest rate depends on multiple factors, including the interest rate set by the Bank of England, your credit score, down payment, loan-to-value (LTV) ratio, and the loan term. Consequently, the interest rate varies for each individual. However, with our experience and strong relationships with contract-friendly lenders, we can find the best deal tailored to your needs.
Does location matters when buying buy to let property?
When investing in property, ensure it will be profitable. The location is crucial. Many landlords prefer nearby properties for easier management, but profitability is key.
Consider these factors when choosing a location:
- Is the area in demand or expected to grow in the long term?
- What is the current demographic (families, students, young professionals, households with housing allowances)? Will this change soon?
- Are there good transport links?
- Are there local amenities, shops, or good schools?
- What is the benchmark rent in the area?
- Are there major developments planned in the next decade?
- What is the crime rate?
These considerations help estimate the desirability of your property to potential tenants.
How do you get started with a buy-to-let?
Step 1 – Financial Planning: Now is the ideal moment to streamline your finances. Consult with an expert financial adviser to determine the optimal investment amount and expected returns. Additionally, our dedicated mortgage brokers will secure the best deal or mortgage in principle, ensuring you’re well-prepared to make offers when the perfect property surfaces.
Step 2 – Choosing your property: Discovering the right property and successfully having your offer accepted is a pivotal step. While the process may be expedited for rental properties, allow for a realistic timeframe, typically spanning several months.
Step 3 – Insurance: Protect your investment by securing essential insurance coverage. In addition to standard buildings insurance, safeguard against unforeseen expenses such as tenant injuries, property damage, and loss of rent.
Step 4 – Choosing your Tenants: Whether through an agency or private search, finding the right tenants is crucial. Even if you personally know and select your tenants, our advice is to formalize the arrangement with a legally binding contract. Friendships have been strained over less than a flat!
Step 5 – Investment Management: Buy-to-let demands ongoing attention. Regularly review your mortgage terms, conduct necessary property maintenance, and optimize your rental income for tax efficiency. Our team can assist you in future mortgage opportunities.
Can I buy the investment property under my Limited company?
Recent tax changes have made purchasing buy-to-let properties through a limited company more common. The company must be a Special Purpose Vehicle (SPV) with the correct Standard Industrial Classification (SIC) codes.
Although limited company buy-to-let mortgages are generally more expensive, the tax benefits can make this option more suitable. Expert advice from a specialist tax advisor is crucial.
What are benefits of Limited Company Buy-to-Let (SPV)
Opting for a BTL mortgage through a Limited Company or Special Purpose Vehicle (SPV) offers significant tax advantages and greater flexibility for property investors.
Key Benefits:
- Tax Efficiency: Benefit from lower corporation tax rates and full mortgage interest deduction as a business expense.
- Profit Retention: Ability to retain profits within the company for reinvestment.
- Flexible Ownership: Enhanced estate planning and tax-efficient profit distribution options.