Buy-to-Let Mortgages For The Self-Employed

We’ll explain all the essential details about getting a buy-to-let (BTL) mortgage if you’re self-employed. We’ll explain the criteria you need to meet, how affordability is assessed, and where to find the best BTL mortgage deals.

Keep reading for a complete explanation or click on a link below to jump straight to a section…

Can you get a buy-to-let mortgage if you’re self-employed?

This is definitely possible, but it can be more difficult than it is for those who are not self-employed. The reason is, that if you run your own business, or are a contractor or freelancer – your income situation will be more complex on paper. The result of this is that it will reduce the number of lenders willing to offer a competitive buy-to-let mortgage.

However, there can, be exceptions to this. If you’re an experienced self-employed landlord with a portfolio of properties and a strong track record in the industry, some buy-to-let mortgage lenders may look at your application more favourably than an employed borrower with no landlord experience.

How buy-to-let mortgage eligibility and affordability will be assessed

Part of the reason it’s harder to find a great buy-to-let mortgage deal if you’re self-employed is that your situation and circumstances will be very unique. Because of this, some lenders won’t have the flexibility necessary in the way they assess things to evaluate your mortgage needs favourably.

Here are some of the main ways that affordability assessments and eligibility criteria for a self-employed buy-to-let mortgage can differ from other types of mortgages:

Self-employment structure

The nature of how you make money can be a factor for some lenders. For example, there are lenders who will be more comfortable dealing with sole traders and limited companies. Then, there are others who will specialise in buy-to-let mortgages for contractors and freelancers.

So, it’s important that you deal with a lender whose mortgage services suit your situation.

Affordability assessment

With a buy-to-let mortgage, affordability is largely based on projected rental income. Often, these projections need to be around 125-145% of the mortgage payments.

Nowadays if you’re self-employed and can show evidence of just £1 profit, it’s possible to secure a competitive buy-to-let mortgage if you deal with the right lenders.

But for those who are self-employed, additional obstacles can be put in place. This sometimes involves a minimum income of at least £25,000 or higher potential rental income for the property.

You can get an idea of what your maximum borrowing is likely to be by using our mortgage calculator.

Deposit amount

Typically, deposit requirements for a buy-to-let mortgage can be higher than for a residential mortgage – typically at least 25%. Also, an even larger deposit is sometimes requested if you’re self-employed, or you may not be offered the best BTL deal with a smaller deposit.

But if you speak with the right lenders, you’ll be able to get a top BTL mortgage no matter the size of your deposit.

Previous landlord experience

If you have experience as a landlord, this can work in your favour. Especially when you’re attempting to access the best deals or qualify for more flexible criteria such as no need for proof of income.

How to get a buy-to-let mortgage if you’re self-employed

Getting a buy-to-let mortgage doesn’t need to be any more complex if you’re self-employed as long as you follow some important steps along the way. First, make an enquiry with us and we’ll arrange for a buy-to-let mortgage broker to contact you who can help with:

• Advice on what specific eligibility criteria mortgage lenders will look for – specifically the type of property you’re looking to buy and the rental projection required  
• Download and optimise your credit reports in order to look for any inaccuracies or outdated information that could hinder your application
• Finding the best mortgage lenders who have previous experience in this area of lending

Available BTL mortgage lenders

The range of lenders you’ll be able to access for a buy-to-let mortgage will depend on the property in question. And, your particular position as a self-employed individual. But to give you an idea of lenders open to offering BTL mortgages for self-employed applicants, here are some examples at the time of writing (August 2023):

• HSBC
• Santander
• Natwest

To see your full range of options, your best bet is to speak with a skilled advisor. If you’re self-employed, using an expert broker who has existing relationships with lenders across the country means that they’ll be able to show you all the best buy-to-let mortgages available on the market.

Remortgaging a buy-to-let mortgage when you’re self-employed

If you plan on remortgaging a buy-to-let property, getting advice from a broker can be extremely helpful if you’re self-employed. This is because your employment type may have changed since you took out your original mortgage. Or, it may be the case that you were employed by a company when you set up the BTL mortgage and are now self-employed.

Things should be relatively straightforward if you were self-employed when you took out your original mortgage and little has changed since then, but if you were in full-time employment at the time, expect lenders to carry out stringent affordability checks from scratch.

Like residential mortgages, buy-to-let mortgages usually come with introductory rate periods where your monthly payments are cheaper. Most experts would recommend shopping around for a remortgage at least six months before your initial rates period ends.

Either way, the best way to see if it makes sense to stick with your current lender, or perhaps switch somewhere else for a better deal, is by speaking to an expert broker. They can review your current situation and advise you on all your buy-to-let remortgage options.

Speak with a buy-to-let mortgage expert

Finding the best buy-to-let mortgage deal can be difficult if you’re self-employed. But, it doesn’t need to be that way and you can skip many common obstacles by using a skilled mortgage broker.

We offer a free broker-matching service. This means we’ll quickly assess your buy-to-let mortgage plans and then pair you up with a specialist broker whose services fit your needs.

Just call 0808 189 2301 or make an enquiry. We’ll arrange a free, no-obligation chat between you and a broker who specialises in arranging these mortgages today.