What is the minimum income requirement for buying to let?
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yorkiesteve
1 year ago
Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
This varies widely.
some lenders simply insist that you have an income of any amount and others will state £20000-£25000 as a minimum. Some will also impose a minimum age of 21 and wont lend to first time buyers / first time landlords.
what seems like a straightforward question, sadly doesnt have a simple answer.
you will also need a decent deposit to make the costs viable, at least 25% and most lenders will require the rent (assessed by their valuer) to be on average 125% of the mortgage ie if the mortgage is £500pcm the rent must be at least £625pcm
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some lenders simply insist that you have an income of any amount and others will state £20000-£25000 as a minimum. Some will also impose a minimum age of 21 and wont lend to first time buyers / first time landlords.
what seems like a straightforward question, sadly doesnt have a simple answer.
you will also need a decent deposit to make the costs viable, at least 25% and most lenders will require the rent (assessed by their valuer) to be on average 125% of the mortgage ie if the mortgage is £500pcm the rent must be at least £625pcm
Expert Financial Adviser Answer
Paul Ross DipPFS CII(MP&ER)
answered 1 year ago
Most lenders do not judge you by the income you have, but that the rental income is at least 120% of the monthly mortgage payment
As an IFA, I would need to know many more facts, though, before I would give a comprehensive answer as there are several factors I'd need to know and that you need to be aware of, especially the tax implications on rent received and capital gains tax.
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As an IFA, I would need to know many more facts, though, before I would give a comprehensive answer as there are several factors I'd need to know and that you need to be aware of, especially the tax implications on rent received and capital gains tax.
Expert Financial Adviser Answer
John Stirling
answered 1 year ago
It depends on the lender.
As a throw away generalisation, the more income the lender would like to see (either personally or from the property) the lower the risk the lender is taking, and the lower the interest rate will be.
Although even that is quite variable.
There is no specific regulatory minimum.
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As a throw away generalisation, the more income the lender would like to see (either personally or from the property) the lower the risk the lender is taking, and the lower the interest rate will be.
Although even that is quite variable.
There is no specific regulatory minimum.
Expert Financial Adviser Answer
Dr David Carter FPFS
answered 1 year ago
And from your point of view, the minimum income should be enough for you to be able to pay the mortgage and keep the property going indefinitely if, for some reason, you do not have a tenant in place.
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