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OMB guide 4 of 16 · 2027 edition

Buy-to-Let Mortgages, Explained

How buy-to-let lending is assessed, what changes for landlords in 2027, and personal versus limited company ownership.

Written by the OMB team · reviewed by Akhil Mair, Managing Director, CeMAPUpdated October 2026How we write and check our content

In this guide
  • How lenders assess a buy-to-let application
  • Personal name or limited company after April 2027
  • A fictional, illustrative case study
Get all 16 guides as PDFsBuy-to-let mortgages

How buy-to-let mortgages work

A buy-to-let mortgage is built around the property as well as the borrower. Lenders mainly assess the rent the property will achieve, usually requiring it to cover 125–145% of the mortgage payment at a stressed rate. Deposits are higher than for a home, usually 25% or more.

5.47%Average fixed buy-to-let rate, September 2026 (Which?)
22%New basic rate on personal property income from April 2027
25%+Typical minimum deposit for a buy-to-let purchase

Personal name or limited company?

This is the biggest structuring decision most landlords make. Individuals cannot deduct mortgage interest from rental income; they receive a tax credit instead, which rises from 20% to 22% in April 2027. Companies can deduct finance costs in full and pay corporation tax. Company mortgages often cost a little more and profits taken as dividends are taxed again, so the right answer depends on your wider tax position, not just the rate.

The 2027 Tax And Regulation Landscape

Property income tax. From 6 April 2027, rental profits held personally in England, Wales and Northern Ireland are taxed at 22%, 42% and 47%, two points above standard rates. Companies are not affected.

Renters' Rights Act. Section 21 ended on 1 May 2026 and tenancies are now periodic. Landlords must register on the PRS Database by 14 November 2027.

Stamp duty. Additional properties carry a 5% surcharge on every band in England and Northern Ireland, including the first £125,000.

Interest-only or repayment?

Most buy-to-let mortgages are interest-only, keeping payments lower and cash flow higher, with the loan repaid from a sale or refinance. Lenders want a credible plan for repaying the capital at the end of the term.

Remortgaging an existing let

When a fixed rate ends, most mortgages move to the lender's variable rate, which is usually much higher. Reviewing your options three to six months before your deal ends is one of the simplest ways to protect your margin.

Illustrative example · not a real client

Personal versus company ownership: a fictional case study

Michael, a higher-rate taxpayer with two rental flats held personally, was planning a third purchase. Working through the 2027 tax changes with his broker and accountant, he bought the new £230,000 flat through a newly formed limited company. The company could deduct the mortgage interest in full, which outweighed a company buy-to-let rate around 0.3 percentage points higher than a personal product.

Names, figures and circumstances are fictional and illustrative only. They do not represent an actual client of Our Mortgage Broker Limited.

Buying, remortgaging or growing a portfolio?

Speak to a CeMAP-qualified OMB adviser: whole-of-market advice, with any fee confirmed in writing before you proceed. Read more about buy-to-let mortgages.

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Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Our Mortgage Broker Limited is authorised and regulated by the Financial Conduct Authority (FRN 944663). Registered in England and Wales, company no. 11358646. Registered office: 23 Berkeley Square, Mayfair, London W1J 6HE. There may be a fee for mortgage advice: we may charge up to 1% of the loan amount, and our typical fee is £500. Your fee agreement sets out the exact fee and when it is payable (at decision in principle, application or mortgage offer); fees are not refundable once due. We usually also receive commission from the lender. This guide is general information only and is not personal advice. Case studies are fictional, illustrative examples and do not represent real clients. Rates, tax and regulatory information are correct as at October 2026 and may change, including at the Autumn Budget on 28 October 2026.