Portfolio Landlord Mortgages

The Prudential Regulation Authority generally defines a portfolio landlord as a borrower with four or more mortgaged buy-to-let properties.

When establishing whether you are a portfolio landlord, a lender may take account of mortgaged rental properties that you own:

• In your sole name
• Jointly with another person
• Through a limited company
• Through another business structure
• Across more than one lender
• In some cases, through a connected business

The precise calculation can vary between lenders. For example, lenders may have different approaches to jointly owned properties, limited company investments, holiday lets, houses in multiple occupation and commercial property.

Unmortgaged properties may still be included when the lender assesses your experience, assets, rental income and overall financial position, even if they do not count towards the formal portfolio-landlord threshold.

If you are unsure whether a lender will treat you as a portfolio landlord, MortgageKey can check its criteria before an application is submitted.

A portfolio landlord mortgage is a buy-to-let mortgage arranged for an applicant who owns or will own a portfolio of rental properties.

It is not necessarily a separate type of mortgage product. The term usually describes the specialist underwriting process applied to landlords with four or more mortgaged buy-to-let properties.

A portfolio landlord mortgage may be used to:

• Purchase an additional buy-to-let property
• Remortgage an existing rental property
• Replace an expiring mortgage product
• Raise capital for another investment
• Fund property improvements
• Restructure borrowing within a portfolio
• Transfer or purchase a property through a limited company
• Purchase a house in multiple occupation
• Finance a multi-unit property

Each property will usually have its own mortgage and legal charge. The lender may nevertheless consider the performance and borrowing of the entire portfolio when deciding whether to approve a new application.

A landlord with several mortgaged properties may face risks that are not present in a single-property application.

These can include:

• Several mortgage payments increasing at the same time
• Rental voids across multiple properties
• Unexpected maintenance costs
• Tenants falling behind with rent
• Concentration within one geographical area
• Reliance on one type of tenant or property
• Exposure to changing interest rates
• Changes to taxation or landlord regulation
• Properties with weak rental coverage
• High borrowing across the wider portfolio

The lender will want to understand whether the portfolio remains sustainable if costs increase or rental income falls.

It may assess both the individual property and your overall property business. A strong property may not automatically result in approval if the wider portfolio is heavily borrowed or generates insufficient rental income.

Portfolio landlord criteria differ significantly between lenders.

MortgageKey can review:

• The number of properties you own
• Property values and mortgage balances
• Rental income across the portfolio
• Current mortgage rates and expiry dates
• Overall loan-to-value
• Personal or limited company ownership
• Your income and credit history
• The property being purchased or remortgaged
• Your deposit and its source
• Your future investment strategy

We can then search for lenders whose portfolio requirements may fit your circumstances and explain the rates, fees, rental calculations and information required.

All mortgages are subject to status, valuation, eligibility and the lender’s criteria.