SPECIALIST SOLUTIONS
Buy-to-Let Mortgages With Bad Credit
Bad credit doesn't have to stop you building or growing a property portfolio. Specialist Buy-to-Let lenders take a pragmatic view.
Understanding Buy-to-Let With Bad Credit
Buy-to-Let lending has always worked a little differently to residential mortgages — lenders focus heavily on the rental income the property will generate, not just your personal income. This actually works in your favour if you have bad credit, because many Buy-to-Let lenders are more relaxed about credit history than their residential counterparts, provided the numbers on the property stack up.
Whether you’re a first-time landlord or growing an existing portfolio, a CCJ, default, missed payment or other credit issue doesn’t automatically rule you out. We work with specialist Buy-to-Let lenders, including those who consider applications via Limited Company or SPV structures.
What Lenders Look At
Rental income (rental cover). Most Buy-to-Let lenders want the expected rent to cover 125-145% of the mortgage payment, calculated at a set stress rate. This is usually the primary affordability test.
Deposit size. A larger deposit, often 25% or more with adverse credit, opens up more lenders and better rates.
Your credit history. As with residential lending, the age, type and severity of any credit issue matters, but Buy-to-Let lenders are generally more flexible on this than residential lenders.
Landlord experience. First-time landlords may face slightly more restricted options than experienced portfolio landlords, though plenty of lenders welcome both.
Ownership structure. Whether you’re buying personally or via a Limited Company/SPV affects which lenders are available and how the application is assessed.
Portfolio Landlords
If you own four or more mortgaged Buy-to-Let properties, you’re classed as a portfolio landlord, and lenders assess your whole portfolio’s finances alongside the new application. This adds complexity, but specialist lenders are experienced in portfolio assessments and, combined with bad credit, this is an area where the right broker relationship makes a real difference.
Buy-to-Let Mortgage FAQs
Is it easier to get a Buy-to-Let mortgage than a residential one with bad credit?
Often, yes. Because Buy-to-Let lending relies heavily on rental income rather than personal income, many lenders in this space are more flexible on credit history than residential lenders, provided the rental cover and deposit requirements are met.
Can I buy through a Limited Company with bad credit?
Yes, many specialist lenders offer Limited Company/SPV Buy-to-Let mortgages and consider the personal credit history of the directors as part of the assessment. This structure is popular for tax reasons as well as with portfolio landlords.
What deposit do I need for a Buy-to-Let with bad credit?
Typically at least 25%, sometimes more depending on the severity and recency of the credit issue and the rental income the property will generate.
Can first-time landlords with bad credit still apply?
Yes, though options may be somewhat more limited than for experienced landlords. We’ll identify lenders who are comfortable with both first-time landlords and your specific credit history.
Ready to Explore Your Options?
Get a free, no-obligation assessment of your Buy-to-Let mortgage options, whatever your credit history.