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Secured Loan Buy to Let

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Aug 16, 2022

Buy to let secured loans – Compare rates, lenders & apply online now

A secured loan, or second-charge mortgage, can be a great financial solution for landlords who want to buy another property or consolidate debt.

You can also get a buy-to-let (BTL) secured loan to raise cash for your next property quickly.

Read from the top for a complete guide to secured loans to buy-to-let properties.

Our advisors are specialists in securing second-charge mortgages for buy-to-let properties.

For a no-obligation mortgage advice chat, send an enquiry. We’ll match you up with an expert to answer all your questions and find the best lender for you.

We have a few mortgage providers lending debt-secured loans for investment properties, buy-to-let mortgage loans to people with poor credit histories, and people with other obligations. We can find the best mortgage deal for you regardless of your circumstances.

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What is a second-charge mortgage?

A second charge mortgage is a loan secured against your equity, effectively giving you two mortgages.

This type of loan is sometimes called a second mortgage, secured loan, or homeowners loan. This arrangement offers many advantages to those who want to release equity from a buy-to-let property or a portfolio of BTL properties.

Why should you choose a buy-to-let secured loan?

If you want to free up equity from your buy-to-let property, a BTL secured loan can offer you some advantages.

These include:

  • Maintaining an excellent existing mortgage rate – If your credit score isn’t as great as it used to be, a secured loan could be a better option than remortgaging your buy-to-let property at a higher interest rate.
  • No early repayment fees Remortgaging may incur an early repayment fee. A buy-to-let secured mortgage would result in no early repayment charges as long as your mortgage remains intact. A ‘buy-to-let’ lender with a second charge might be more financially beneficial in this case. Check your mortgage terms to determine if you might be subject to an early redemption fee.
  • It might be easier to get– Second-charge loans for buy-to-let properties can sometimes be easier for people with poor credit ratings. A second charge mortgage may be an option if you have been denied a mortgage because of poor credit, income, or affordability.
  • Are you looking for a quick loan to cover a small amount? Rates can vary depending on your credit score.

A secured loan for a buy-to-let property can allow you to borrow more than an unsecured personal loan.

The maximum amount is £25,000. Unsecured loans can be more affordable than first-charge mortgages, often subject to tighter requirements. Personal loans may not be suitable for everyone.

Talk to an expert about the options available, and they will help you determine the best financial solution for your situation. Send us an enquiry, and we’ll match your request with one of our expert buy-to-let brokers.

Our experts have access to all UK mortgage lenders and have a whole-of-market view.

They have the knowledge and resources to ensure you get the best rates for a product that works for you.

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What are the best uses for a BTL second-charge mortgage?

To obtain a second charge mortgage on an existing property, many buy-to-let investors use it to secure a mortgage for a buy-to-let purchase. This mortgage is used to help them start or expand their property portfolio.

They are also easy and quick to capitalise on investment opportunities you didn’t anticipate.

If you have the equity, meet the lender’s criteria, and need cash to improve your home or for a vacation, you can get a secured loan to help you pay for everything you need.

Who is eligible to apply for a second-charge buy-to-let mortgage

A second charge buy-to-let mortgage can be used for by almost any property owner, provided they have the required equity and income.

If your circumstances warrant it, you can even have a 3rd or 4th charge mortgage.

Can I get a loan secured on a property that is being bought to let?

A secured loan can be taken out on a property that is rented. While you can borrow up to 100% of your equity if you use the rental property as security, lenders will typically limit the amount you can borrow.

Each lender has its criteria. However, if you meet their affordability criteria, you can find a lender that will offer you a secured mortgage against your buy-to-let.

Send us an enquiry, and we’ll match your request with one of our expert mortgage brokers. The experts are all whole-of-market mortgage brokers and will help you find the right loan at the best price.

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What is the maximum amount I can borrow for a second mortgage charge?

Lenders will assess a second charge mortgage in the same way as a first charge mortgage.

  • Your income
  • Expenditure
  • Available equity
  • Credit history

While you will still need proof of your income and ability, the lender will only lend the amount your equity will allow.

Equity in your home refers to the amount of property you own outright. If your home is valued at £200,000 and you have a £150,000 mortgage, you will have £50,000 equity.

Equity can increase with the property’s increased value and your mortgage payment.

Lenders will allow you to borrow as low as £10,000. Your lender will lend more if your equity is higher than your property.

Maximum affordability

Buy-to-let mortgages are essentially self-funded.

This is because the mortgage calculation is based upon the rental income from the property. Each lender then calculates the maximum loan amount in its way. Some lenders are more generous than others.

The reality is that rent payments can fluctuate depending on their location. They may stop suddenly for several reasons, including failure to find or replace tenants, damage that could make the property unsafe for a period, or fluctuations in the market for rent.

The rental income you expect is directly tied to how much you can borrow for a mortgage buy-to-let.

Some lenders will allow you to use your earned income if there is a shortfall.

Lenders must conduct strict affordability assessments for buy-to-let mortgages to protect themselves and their applicants.


What is the maximum amount of a loan?

Lenders typically limit lending to buy-to-let properties to a loan-to-value (LTV) of 75%. Some lenders will consider up to 80%, while others may allow up to 15% in certain circumstances.

Non-equity lenders may offer higher rates to landlords and homeowners than a 100% LTV loan. This may be an option for you if it is affordable.

Some lenders may also consider an additional advance on buy-to-let mortgages, provided it does not exceed a specific loan-to-value ratio.

Send us an enquiry if you’re interested in borrowing higher LTV on a property to buy-to-let, possibly over 100%. We’ll then refer you to the appropriate expert.

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Secured loans for buy-to-let

Buy-to-let 2nd-charge mortgage rates are relatively low. They also have lower buy-to-let charges. This makes them a cost-effective alternative to other types of unsecured loans.

Your situation will determine the rate you can get. Due to the low-risk nature and affordability of the application, borrowers with clean credit will be able to borrow an amount that is ‘easily affordable’.

Borrowers with severe or recent adverse credit problems will likely be offered higher rates to offset the lender’s risk.

Specialist lenders will accept your application, even if you have poor credit. Send us an enquiry, and we’ll match your request with an expert who has experience in arranging second-charge mortgages for customers with similar credit scores.

Our experts are all whole-of-market brokers and have access to lenders in the UK. Their experience, tools and knowledge will help you determine which lender offers the best deal based on your situation.


How to obtain a second charge mortgage for a BTL

A secured mortgage can be applied for from a lender directly or through a broker, just like a regular mortgage. The lender will value your property as security. The lender will evaluate your application for affordability, credit history, etc.

For additional borrowing, you can use a different lender

You don’t need to get a second mortgage from your mortgage provider for your buy-to-let. One of our expert advisors could be able to help you get a better deal from a different lender while still keeping your existing mortgage intact.

Talk to an expert for guidance.

It is essential to seek the best advice before you decide to take out a second mortgage on your buy-to-let. For a no-obligation chat, enquire here.

We will match you with an expert broker who will be glad to answer any questions. They will connect you with the right lender to offer the best rates on the product that best suits your needs.

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