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Buy-to-let plans

These plans are temporarily unavailable - the details below provide guidance in the meantime.

If you are looking to borrow against, or purchase a buy-to-let property, you may be interested to learn more about buy-to-let (BTL) equity release schemes.

These schemes are in place for landlords looking to extend BTL property investments, benefitting their tax planning and retirement options.

The plans offered include options for lump sum roll-up or voluntary repayment, all on a buy-to-let basis. Each plan has its own advantages and disadvantages, so it’s worth speaking to one of our experienced advisers before considering a buy-to-let equity release.

What is a buy-to-let equity release?

One lender, Canada Life, defines a buy-to-let property as one that is not occupied by the owner and must be let-out under an Assured Shorthold Tenancy Agreement. Multiple properties can be used with more than one landlord buy-to-let plan.

You can read more about the Canada Life BTL equity release plans here.

Background to buy-to-let equity release

Equity release on a buy-to-let property has been available via lifetime mortgages on and off since 2009. These initial loans required a short-hold tenancy agreement in place, and rental income usually had to at least cover the interest charged by the lender.

However, since 2013, many efforts have been made to force a rethink in the potential of landlord equity release schemes. Since then, interest rates have fallen significantly, flexible equity release schemes have been designed and repayment options introduced.

Furthermore, landlords themselves have been further hit with additional stamp duty levies on second home purchases and reductions in tax relief that can be claimed on interest-paying BTL mortgages. Then we have the interest-only time bomb effect, also applicable to the rental sector, where lenders have introduced higher stress testing – which has resulted in many older BTL mortgages not being extended at the end of their terms.

Investment landlords are now looking for alternative sources of funding enabling them to keep their investment and associated income.

Do I qualify for a buy-to-let equity release scheme?

To apply for a buy-to-let equity release plan, you must first be over the age of 55 (but no older than 90 years of age). This applies to the youngest property owner, should it be in joint names.

To qualify for a landlord scheme, your property’s value must be a minimum of £70,000 and no more than £6 million. Your property must also be situated in either England, Scotland or Wales.

There are also a few other factors to consider, and these will be highlighted by one of our experienced advisers if you arrange a free consultation.

How much can I borrow using buy-to-let equity release?

This is very much dependent upon your individual circumstances and property portfolio. Our buy-to-let calculator will give you an indication of how much you could borrow.

Key features of buy-to-let landlord mortgages

Landlord equity release providers use their core lifetime mortgage range as the foundation for their buy-to-let plans. These come in a range of flexible features, including options such as voluntary repayment.

An advantage of using this type of scheme is that repayments can be made to the lender should control over the balance be required. This in turn would reduce interest being charged, thus limiting the future balance to be repaid. These repayments are not checked for affordability and require no proof of income to qualify.

Landlord schemes also have the benefit of fixed early repayment charges of 8 years, with no penalty remaining thereafter – should you be considering repaying your plan in full in the future.

Please note, the majority of Over 55 Buy-to-Let Mortgages are unregulated, they share similar characteristics with a Lifetime Mortgage, however they are not defined as a Lifetime Mortgage by the FCA. To understand their features, benefits and risks, please contact Equity Release Supermarket for a no obligation, personalised, key facts illustration. All quotes can be tailored to your own circumstances and you are under no obligation to proceed.