Portfolio buy-to-let mortgages

Portfolio buy-to-let mortgages

Some landlords are happy with one buy-to-let property, while others have a couple that they rent out. Then there are those classed as portfolio landlords because they own several properties. As a portfolio landlord, you will need a particular type of mortgage for your investments. This is known as a portfolio buy-to-let mortgage.

How many rental properties does a landlord need to be a portfolio owner?

Generally speaking, you are considered a portfolio landlord when you have four or more properties. However, things can get a little complicated, as the portfolio status revolves around the number of mortgaged properties.

To illustrate, if you own five properties, but two of them don’t have a mortgage, you won’t be considered a portfolio landlord. Likewise, if you own three mortgaged properties, you also don’t have a portfolio. It needs to be at least four mortgaged properties.

Once you have four or more buy-to-let properties with a mortgage, you will be subject to portfolio underwriting checks, also known as portfolio stress testing. Lenders need to ensure that you’re in a robust financial position, although the criteria depend on the requirements of the lender you’re applying with.

What is a portfolio buy-to-let mortgage?

A portfolio buy-to-let mortgage is specific for landlords who have multiple investment properties. Instead of mortgaging their investments separately, they take out a single mortgage to cover the entire portfolio. As a result, they hold their buy-to-let mortgages under one umbrella.

Instead of having several mortgage providers for each property, the portfolio is managed by just one lender. You also have one single monthly payment and statement, which makes it easier to keep track of everything.

Again, criteria changes depending on the lender and your personal circumstances. Therefore, there is a benefit to using a broker as we can find you the best lender and products suitable for your circumstances. Also we will do all the leg work for you, from application to sorting out the paperwork. As this can become very time consuming if you have a number of applications to submit.

Whether you have a portfolio in your personal name or limited company and you need some advice. We are here to help.

As a general rule of thumb, you can expect the following factors to be considered:

•         Mortgaged properties Vs Unencumbered properties

•         Loan to value (LTV) of the overall portfolio

•         Your landlord experience

•         Previous and future cash flow from your portfolio

•         Income from the properties and other sources, such as your job

•         Details of current mortgages on your buy-to-let properties

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

There may be a fee for mortgage advice. The Financial Conduct Authority does not regulate some forms of buy to lets.

We do not provide tax advice, but can provide contacts if specialist tax advice is required