Types of buy-to-let mortgage
"Buy-to-let mortgage" covers several genuinely different products. This page is a map of the main ones, each with a link through to a fuller guide where we have one.
- Plain English, about 6 minutes
- General information, not advice
- No invented rates
Interest-only vs repayment
Most BTL mortgages are taken on an interest-only basis — lower monthly payments, but the loan balance doesn't reduce, so you need a plan to clear it at the end of the term (sale, remortgage, or other funds). Repayment (capital + interest) is also available from many lenders and gradually pays off the loan, at the cost of higher monthly payments. See our basics guide for more detail.
Fixed vs tracker/variable rate
- Fixed rate — your rate is locked for an initial period (commonly 2 or 5 years, sometimes other lengths), giving payment certainty; usually reverts to a follow-on rate afterwards, and often carries an early repayment charge (ERC) if you exit early.
- Tracker rate — moves in line with a reference rate (typically the Bank of England base rate) plus a fixed margin, so payments can rise or fall.
- Standard variable/reversion rate — what you typically move to after a fixed or tracker deal ends, unless you remortgage; usually higher and worth avoiding by planning ahead.
Note: under lender/PRA-influenced practice, rental-cover ("stress test") calculations are often less strict for longer fixed-rate deals (e.g. 5 years+) than for shorter ones, because the payment is more predictable for longer — but exact treatment varies by lender.
Personal ownership vs limited company
You can buy in your own name(s) or through a limited company (often called a Special Purpose Vehicle, or SPV). This affects tax treatment, the range of lenders available, and admin overhead. See the full limited company buy-to-let guide.
By property type
HMO
Houses in multiple occupation — specialist valuation and licensing considerations.
Holiday let
Assessed on seasonal income projections rather than a standard tenancy.
Portfolio (4+ properties)
Whole-portfolio underwriting rules apply once you hold four or more mortgaged BTL properties.
Let-to-buy and remortgaging
Let-to-buy describes converting a home you currently live in into a rental — often via "consent to let" from your existing lender, or by remortgaging it onto a BTL product — while you buy a new residential home elsewhere.
Remortgaging a BTL property (moving to a new deal, with your existing lender or a new one) is common at the end of a fixed or tracker period, both to avoid reverting to a higher standard variable rate and to release equity if the property's value has grown — subject, again, to rental-cover and lending criteria at the time.
FAQ
Which type is "best"?
There's no universal answer — it depends on your tax position, how many properties you plan to hold, your risk appetite around rate movements, and the specific property. This is a good question to bring to an independent broker with your actual numbers.
Can I switch from interest-only to repayment later?
Sometimes, subject to the lender's criteria at the time — it's not automatic. Ask your lender or broker about switching options before you assume it'll be straightforward.
Next step
Once you know roughly which shape of product fits your situation, compare independent brokers for current products and rates.