How many buy to let mortgages am I allowed?
This is a common question we receive from landlords who are looking to expand their portfolios. We have a wide range of clients from huge property portfolios and single buy to lets.
Some of these clients with huge property portfolios have buy-to-let mortgages on every single one of their properties, which would suggest that it is possible to have as many mortgages as you need to grow your portfolio.
But it is not always that straightforward…
A number of lenders have an exposure limit which means that will only allow you to borrow a certain amount of money from them, or, only allow you to have a certain number of mortgages with them.
Secondary to this some lenders have a limit to the amount of exposure you have with other lenders. Meaning that you can only have a certain number of mortgages with another lender, or a certain amount of money borrowed. This is often referred to as ‘in the background’.
Portfolio landlords will have further restraints put on them by some lenders in that lenders are obliged to assess the buy to let mortgage application AND your entire portfolio and total borrowing levels.
Lenders prefer the leverage to be between 65% and 75% loan to the value of the entire portfolio. The rental income from the portfolio needs to cover all the mortgage interest with a surplus. The way lenders calculate this does vary – some want the whole thing to wash at 125% assuming a rate of 5.5%, some 145% at 5.5%, and others use a bespoke calculation. Some lenders will accept your own portfolio spreadsheet, others prefer a particular format
Speak to us today about your options for adding more buy to let mortgages to your lending portfolio.
