Buy-to-Let Mortgages in Northern Ireland

Want to invest in Northern Ireland? Find out how to secure the best deal for your buy-to-let mortgage with the help of a specialist broker

Are you looking to mortgage a property in Northern Ireland?

Home Buy To Let Mortgages Buy-to-Let Mortgages In Northern Ireland
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Jon Nixon

Reviewer: Jon Nixon

Director of Distribution

Updated: March 15, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

March 15, 2024

In this article, we’ll look at whether buy-to-let mortgages differ in Northern Ireland from the rest of the UK, why it can be hard to find a suitable lender, and how to secure the finance you need.

Can you get a buy-to-let mortgage in Northern Ireland?

Yes, although it can be slightly more difficult than in other parts of the UK due to fewer lenders operating in this region. However, it’s absolutely possible with the right advice and guidance from an experienced broker.

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Deposit and eligibility criteria

Buy-to-let mortgages are largely the same in Northern Ireland as in the rest of the UK, and you’ll need the same deposit: around 25% as a minimum. That said, there are some circumstances specific to property investment here that can mean you’ll need more.

  • Geographical restrictions – Buy-to-let properties in rural areas of Northern Ireland are classed as high risk, as the rental market can be slow and properties may sit empty. Fewer lenders offer mortgages here, so any available mortgages will typically have higher rates and require a larger deposit.
  • Property Type – Many lenders shy away from properties that are considered non-standard construction. As there are many rural towns in Northern Ireland, farmhouses are fairly prevalent, and these are likely to be considered non-standard, especially if they are listed buildings or thatched roof properties.
    Not all lenders will consider HMO properties, so if you’re looking at this type of investment, your options may be even more limited. Again, a larger deposit requirement and higher rates are likely to apply if your investment property is anything outside of a typical bricks and mortar building.
  • Landlord experience – It’s harder to get a buy-to-let mortgage anywhere in the UK if you’re a first-time buyer. Because there are fewer lenders in Northern Ireland, it can be very difficult to find one that’s happy to accept first-time landlords. A larger deposit may help.

Other specific criteria

If you’re planning to become a landlord in Northern Ireland, there are a few specific rules that you need to consider:

  • All landlords in NI must register under the Landlord Registration Scheme. A certificate must be obtained from this scheme to offer properties for rent, containing accurate information about any rental properties you own. It costs £70 and must be renewed every 3 years.
  • To operate HMO (House of Multiple Occupation) properties you’ll need to obtain a license from the local authority for the area the property falls under
  • If you’re planning to use your rental property as a holiday let, you may also need to obtain a certificate from Tourism NI

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How to get a buy-to-let mortgage in Northern Ireland

A smart move initially is to speak with an experienced buy-to-let mortgage broker who has a successful track record with customers in Northern Ireland. Using our free broker-matching service you can speak straight away to the right mortgage broker by simply making an enquiry online.

They’ll be able to help with:

  • Understanding your chances of approval. Around a dozen lenders are offering buy-to-let mortgages in Northern Ireland, so they’ll check if you meet the eligibility criteria of these to save you from wasting time on applications.
  • Local insight. From their experience, your broker may have informed views on which areas offer the highest rental yields and which are less prosperous.
  • Downloading all your credit reports. A strong credit history will definitely help give your application the best chance of success.
  • Gathering the correct documentary evidence. To ensure the application process runs smoothly. A rejected application will leave you with even fewer options remaining, so it’s critical to avoid mistakes.

What interest rates to expect

Interest rates are higher for buy-to-let than residential mortgages across the board, and there is no real difference in cost compared with the rest of the UK, unless, of course, you’re specifically looking at rural areas.

Rates will always vary based on your individual circumstances and the LTV (loan to value) you are borrowing at.

The table below provides an illustration of what rates you can expect currently.

Lender Product Details
Frosted Rates Image

Looking for more rates and deals?

We can match you with a mortgage broker who can provide you with up-to-date bespoke rates and deals from across the entire market.

Last updated May 2024

The rates quoted above were correct at the time of writing and are subject to change at any time at the lender’s discretion. Speaking to a mortgage broker is the best way to keep track of the rates available at any given time.

How much will the repayments be?

Buy-to-let mortgage repayments are usually lower than residential mortgages as they’re interest-only. This means you’ll only pay the interest each month and only repay the capital at the end of the loan. How much you’ll repay depends on how much you borrow and at what rate. You can use the calculator below to get an estimate.

Buy-to-Let Mortgage Calculator

Our buy-to-let mortgage calculator can show you how much your mortgage could cost you each month and overall. Simply enter the rental property value, deposit, anticipated monthly rent, interest rate, mortgage term and our calculator will do the rest.

Enter the value of the rental property here
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A deposit of at least 20% is usually required for a buy-to-let mortgage
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Most lenders will require a deposit of at least 20%
Deposit must be less than the property value
Enter the anticipated monthly rent here
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Enter the mortgage rate, 5.5% is a typical rate currently but this can vary
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Enter the mortgage term, 25 years is the average but lenders can offer shorter and longer terms
years
Borrowing

Loan to Value ratio (LTV):

Most lenders won't offer buy-to-let mortgages over a LTV of 80%.

Interest Cover Ratio (ICR):

Most lenders require rental income to be at least 125%-145% of the interest repayments for a buy-to-let mortgage.

Get started with a specialist buy-to-let broker to find out how much they could help you save on your monthly mortgage repayments.

Which lenders offer these mortgages?

There are no dedicated lenders for the Northern Irish market, so you’ll be choosing between mortgages from some of the mainland UK-based lenders such as Natwest and HSBC, or the Bank of Ireland.

While there aren’t a huge number of mortgage providers, you shouldn’t be discouraged. A broker can still help you to find a great deal from one of the options available.

What are the best buy-to-let areas in Northern Ireland?

Rental demand varies hugely based on location, so if you’re looking for a good return on your investment, you’ll need to focus on areas where the demand and average rental values are high, such as Belfast. Considered one of the top rental locations in the UK for rental yield, Belfast offers a strong return on investment and the demand for properties has increased exponentially over the past 10 years.

Other major cities such as Dungannon, Lisburn and Omagh also offer strong investment options, as do areas with a high student population, such as Portrush and Coleraine. Generally, rental demand mimics the rest of the UK, and global trends in the sense that it is far higher in large cities that are well served by transport and amenities.

To calculate the potential rental yield on the property you’re considering buying you can use the calculator below:

Rental Yield Calculator

This calculator will show you the rental yield on your buy-to-let property using either the original purchase price, plus associated costs, or the current value. All you need to do is choose which option you want to base your calculation on and your monthly rental premiums.

Input either the original property purchase price or current value to work out the rental yield.
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Gross Rental Yield:

Net Rental Yield:

Now you've worked out what your current rental yield is, why not speak to a broker to see what buy-to-let mortgage/remortgage opportunities are available? With their expertise in this market they'll be able to identify a range of new deals which could reduce your mortgage payments and, as a result, improve your overall rental yield.

Is the Rent-to-Buy Scheme available?

The rent-to-buy scheme is available in Northern Ireland, however, it is known as Rent to Own. It can be an excellent way to get a foot on the property ladder, but it wouldn’t be suitable as an investment mortgage.

It allows those with a household income below £60,000 the option to rent a newly built property at 20% below market value for up to five years, depending on the specific property. The idea is that this provides the tenant with the opportunity to save a deposit to enable them to buy the property at the end of the reduced rental period. Criteria vary from one housing association to the next, but the scheme is intended for residential purchases only, whereby the property will be used as the buyer’s main home.ㅤ

Get matched with a buy-to-let specialist in the NI market

We work with brokers across the UK, so sourcing an expert in Northern Ireland property investment couldn’t be simpler.

Whether you’re a portfolio landlord or embarking on your first investment property, get in touch today to access the best advice for your journey. Simply give us a call on 0808 189 2301 or make an enquiry.

Maximise your chance of approval with a specialist in the Irish property market

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FAQs

Yes, you can, and there has been a considerable increase in the number of limited company buy-to-let applications since the changes to UK tax laws relevant to landlords came into effect in 2020. Not all lenders will accept this type of application, however, so it’s even more crucial to speak to a specialist broker in this scenario.

Having an active Insurance policy is not always a requirement of mortgage terms, but is highly recommended for any type of property owner. For buy-to-let properties specifically, landlords insurance (sometimes known as buy-to-let rental insurance), is the most appropriate type. Each policy is different, but they typically cover damage to the property and issues arising from the provision of rental services to tenants.

Stamp duty in Northern Ireland is tiered, so how much you pay will depend on the value of the property, however, as in England and Wales, an additional 3% stamp duty will apply to all second and subsequent properties owned, whether or not they are an investment. If you’re a first-time buyer, the exemption of stamp duty on properties below the £300,000 threshold will not apply to a buy-to-let purchase.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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