How much you can borrow will be dependent on the following factors:
- Property history – if you have ever owned a property before
- How much rental income the investment property will achieve
- Your personal income
- Your credit history
- The deposit amount available
How much do I need to earn to purchase a BTL property?
- High street lenders will require a minimum personal income of circa £25,000 per annum
- Specialist lenders will not require a minimum income
Should I use a limited company to purchase a BTL property?
- Purchasing a buy-to-let property through your limited company will enable you to borrow more money. However, we recommend discussing this with your accountant due to potential tax implications.
- Details such as your income tax bracket will affect the level that you get stressed at by prospective lenders.
What deposit do I require for a BTL purchase?
- You will need a minimum of 25% deposit for a buy-to-let purchase – some lenders may allow a 20% deposit but be aware that interest rates will be significantly higher for an 80% loan-to-value product.
- The predicted rental income of the property will determine the amount you can borrow and impact the required deposit.