What are Buy to Let mortgages?
We have temporarily restricted our lending criteria and withdrawn a number of our mortgage products, including those for buy to let. For the latest updates and essential information during the COVID-19 pandemic read our FAQs.
A Buy to Let mortgage is used when a property is to be bought and let out to tenants. The mortgage holder becomes a landlord and collects rent from the tenant. We want to support people who are entering the buy to let market for the first time and those landlords who have small portfolios of up to three properties. We don't lend to larger, commercial investors or those who hold their properties in a company or business.
It is worth bearing in mind that the regulation and legislation regarding Buy to Let property can change at any time, so anyone considering becoming a buy to let landlord should ensure they do their research first.
Buy to Let lending criteria:
- Maximum term of 30 years
- We only allow borrowers to have three properties with us, including the one being applied for, and no more than three properties within the total portfolio.
- There must be minimum 145% rental cover against the monthly mortgage payment stressed at a rate of interest of either the Product Rate +2% or a minimum rate of 5.5%.
- Total loan to individual/joint borrowers with Ipswich Building Society not to exceed £500,000
- Minimum loan for Buy to Let is £75,000
- No new build flats, studio flats, ex-local authority flats/maisonettes, flats above 5 storeys or flats above commercial property
- Properties must be let on an approved Assured Shorthold Tenancy
- Properties must not be houses in multiple occupation (HMOs) which require licensing Letting must be on an unfurnished basis
- The let will be to an individual (includes couples and families) but not to a company or business
- The buildings insurance policy must be in joint names with the Society and provide a minimum of £1,000,000 public liability cover
- Multi-lets and student lets are not acceptable.
- All properties must hold a valid Energy Performance Certificate (EPC) and meet a minimum Energy rating of E. The EPC is to be provided to the Society upon application. Should the property be exempt from the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, evidence of exemption is required.
- Currently or have previously owned their own home
- Be a UK resident
- Not be in arrears with any mortgage they currently have
- Be in receipt of income from employment/self employment, pension or investment
- Have a minimum annual income of £25,000. In the case of joint applicants, one applicant must have the minimum required figure
For additional information on our mortgage packages and lending criteria, click here.