First Time Buy to Let Mortgage

A first time buy to let mortgage is a specialist loan designed for people who want to purchase a rental property before buying their own home, or who are buying both at the same time. Unlike a standard buy to let mortgage, which typically requires you to already own a residential property, these products are tailored for applicants with no existing homeownership.

The key difference is lender availability. The majority of buy to let lenders have a minimum requirement that you own at least one residential property. First time buy to let products remove that condition, though the trade-off usually comes in the form of higher interest rates, larger deposit requirements, and stricter affordability checks.

These mortgages are assessed primarily on the expected rental income from the property, not your personal salary. However, most lenders offering first time buy to let deals will also set a minimum personal income requirement, typically between 25,000 and 30,000 per year. The property itself must meet standard buy to let criteria: it needs to be suitable for renting, in a lettable condition, and located in an area with demonstrable tenant demand.

Yes, but your options are more limited. Around 15 to 20 lenders in the UK market will consider buy to let applications from people who do not own a residential property. This compares with over 80 lenders in the wider buy to let market, so working with a whole-of-market broker is particularly important to access the full range of available deals.

Lenders who do accept first time buyers typically fall into two categories. Some specialist lenders actively market first time buy to let products with clearly defined criteria. Others will consider applications on a case-by-case basis, often through their underwriting teams rather than through standard automated processes.

There are a few scenarios where lenders may be more flexible. If you are living in a property you do not own, such as renting or living with family, but have a strong deposit and income, several lenders will look favourably on your application. Similarly, if you previously owned a home but have since sold it, some lenders treat you as a former homeowner rather than a true first time buyer, which can open up additional products.

Most lenders require a minimum 25% deposit for a first time buy to let mortgage, compared with 20% to 25% for standard buy to let products. On a property worth 200,000, that means putting down at least 50,000. Some lenders may accept 20%, but the available deals at that level are very limited and typically carry higher interest rates.

A larger deposit directly improves your position. At 30% to 40% deposit, you unlock significantly better rates and a wider choice of lenders. For example, moving from 75% loan to value to 60% loan to value could reduce your interest rate by 0.3% to 0.6%, saving hundreds of pounds per year on a typical buy to let mortgage.

Your deposit can come from savings, gifts from family, or the sale of other assets. Most lenders will not accept borrowed funds as a deposit, so personal loans or credit card borrowing will not be accepted. If a family member is gifting part of your deposit, the lender will typically require a gifted deposit declaration confirming the money does not need to be repaid.

First time buy to let mortgage requirements are stricter than standard buy to let criteria. Here is what most lenders will assess when considering your application:

• Rental coverage: The expected monthly rent must cover at least 125% of the mortgage payment, stress-tested at a rate of 5% to 5.5%. On a 150,000 mortgage, the rent would need to be at least 780 to 860 per month depending on the lender.
• Minimum income: Most lenders set a personal income floor of 25,000 to 30,000 per year. A few will accept 20,000, but these are specialist products with higher rates.
• Credit history: A clean credit record is important. Defaults, CCJs, or missed payments within the last three to six years will significantly reduce your options, though some specialist lenders may still consider you.
• Age: Most lenders require you to be at least 21, with an upper age limit of 75 to 85 at the end of the mortgage term.
• Property type: Standard houses and flats are widely accepted. HMOs, multi-unit freeholds, and non-standard construction properties have fewer lender options for first time buyers.

Your broker will assess your full circumstances against each lender's specific criteria. This is particularly valuable for first time buy to let, where criteria vary significantly between lenders and a rejection from one does not mean you cannot secure a mortgage elsewhere.

First time buy to let mortgage rates are typically 0.5% to 1% higher than equivalent standard buy to let products. As of mid-2026, you can expect rates in the following ranges depending on your deposit size and the product type:

Two-year fixed rates for first time buy to let at 75% loan to value typically start from around 5.2% to 5.8%. Five-year fixed deals at the same LTV range from 5.0% to 5.5%. With a larger deposit of 35% or more, rates drop closer to standard buy to let levels, with two-year fixes from around 4.8% and five-year fixes from 4.5%.

Arrangement fees also vary. Some lenders charge a flat fee of 1,000 to 2,000, while others charge a percentage of the loan, typically 1% to 2%. A fee-free product with a slightly higher rate can sometimes work out cheaper over a short hold period, so it is worth comparing the total cost of each deal rather than focusing on the headline rate alone.

Rates change frequently, so the figures above are indicative. A broker can provide exact quotes based on your specific property, deposit, and circumstances. Getting a buy to let mortgage illustration before you start property hunting helps you set a realistic budget.

Buying through a limited company (SPV) has become increasingly popular since the Section 24 tax changes removed the ability for individual landlords to deduct mortgage interest from rental income. For first time buy to let investors, the decision depends on your tax position and long-term plans.

If you are a higher-rate taxpayer (earning above 50,270 in 2026/27), buying through a company structure can offer significant tax advantages. Corporation tax on rental profits is currently 25%, compared with 40% income tax for higher-rate earners. Company structures also allow full mortgage interest deduction as a business expense.

However, there are trade-offs. Limited company buy to let mortgage rates are typically 0.3% to 0.8% higher than personal buy to let rates. You will also face additional costs: company formation (around 50 to 100), annual accounts filing (500 to 1,500 for an accountant), and confirmation statements to Companies House. For basic-rate taxpayers with one or two properties, the tax saving rarely outweighs these additional costs.

A broker with experience in both personal and limited company buy to let can model the numbers for your specific situation, helping you make the right structural decision from the start rather than having to restructure later, which involves stamp duty on the transfer.