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What is a Buy to Let mortgage?
Find out how to buy a house to rent out with a Buy to Let mortgage.
A Buy to Let mortgage is for people looking to buy a property to rent out, rather than live in it.
Most Buy to Let mortgages are interest only. This means that the monthly repayments will only pay off the interest, not the amount owed on the mortgage (known as capital). Instead, the capital will be paid off in full at the end of the agreed term.
Buy to Let mortgages and Stamp Duty
In England and Northern Ireland, you’ll pay a 3% surcharge on the standard Stamp Duty rate on any Buy to Let property worth over £40,000. From 23rd September 2022 you’ll pay the following Stamp Duty rates. Check out the latest Government guidelines for the Stamp Duty rates.
|
Portion of property price |
Standard Stamp Duty Rate |
Buy to Let Stamp Duty Rate |
|---|---|---|
Portion of property pricePortion of property price |
Standard Stamp Duty RateStandard Stamp Duty Rate |
Buy to Let Stamp Duty RateBuy to Let Stamp Duty Rate |
Portion of property priceUp to £250,000 |
Standard Stamp Duty Rate0% |
Buy to Let Stamp Duty Rate3% |
Portion of property price£250,001 - £925,000 |
Standard Stamp Duty Rate5% |
Buy to Let Stamp Duty Rate8% |
Portion of property price£925,001 - £1.5m |
Standard Stamp Duty Rate10% |
Buy to Let Stamp Duty Rate13% |
Portion of property price£1.5m+ |
Standard Stamp Duty Rate12% |
Buy to Let Stamp Duty Rate15% |
In Scotland, you'll pay a 4% Additional Dwelling Supplement (ADS) on the standard Land and Buildings Transaction Tax (LBTT) on Buy to Let properties worth over £40,000. You'll pay the following rates.
|
Price Bands (£)
|
Standard LBTT Rate |
Buy to Let LBTT Rate |
|---|---|---|
Price Bands (£)Price Bands (£) |
Standard LBTT RateStandard LBTT Rate |
Buy to Let LBTT RateBuy to Let LBTT Rate |
Price Bands (£)Up to £40,000 |
Standard LBTT Rate0% |
Buy to Let LBTT Rate0% |
Price Bands (£)£40,001 - £145,000 |
Standard LBTT Rate0% |
Buy to Let LBTT Rate4% |
Price Bands (£)£145,001 - £250,000 |
Standard LBTT Rate2% |
Buy to Let LBTT Rate6% |
Price Bands (£)£250,001 - £325,000 |
Standard LBTT Rate5% |
Buy to Let LBTT Rate9% |
Price Bands (£)£325,001 - £750,000 |
Standard LBTT Rate10% |
Buy to Let LBTT Rate14% |
Price Bands (£)£750,000+ |
Standard LBTT Rate12% |
Buy to Let LBTT Rate16% |
Pros and Cons: Buy to Let mortgages
The content on this page is for reference and does not constitute financial advice. For impartial financial advice, we recommend government bodies like MoneyHelper.