Investment property mortgages are a very broad product category that includes everything from buy-to-let loans to commercial mortgages. And if you\u2019re thinking of applying for one or simply want more information about this type of finance, you\u2019ve come to the right place.\r\n\r\nIn our guide to investment property mortgages, you\u2019ll learn exactly what type of finance falls into this category, how to get an investment mortgage, what kind of rates to expect and where to turn for the right advice.\r\n\r\nPlus in our FAQ section, we field the questions we hear most often from customers who are looking for finance to buy a property for investment purposes.\r\n<ul>\r\n \t<li><a href="#what-is">What is an investment property mortgage?<\/a><\/li>\r\n \t<li><a href="#how-to-get">How to get a mortgage for an investment property<\/a><\/li>\r\n \t<li><a href="#rates">Investment property mortgage rates<\/a><\/li>\r\n \t<li><a href="#alternatives">Investment mortgage alternatives<\/a><\/li>\r\n \t<li><a href="#experts">Speak to an expert<\/a><\/li>\r\n \t<li><a href="#faqs">FAQs<\/a><\/li>\r\n<\/ul>\r\n[feefo-banner]\r\n<h2 id="what-is">What is an investment property mortgage?<\/h2>\r\nAn investment property mortgage is a type of mortgage used to buy property with the sole intention of generating rental income and\/or an eventual profit from its sale. This is a broad product category, and it includes everything from buy-to-let properties to commercial premises, but properties bought for personal use do not qualify as investments.\r\n\r\nThe specific type of mortgage you\u2019d need for investment property will depend on which category the property you\u2019re buying falls into. There are standalone product categories for\u2026\r\n<ul>\r\n \t<li>Buy-to-let (BTL) mortgages<\/li>\r\n \t<li>Commercial mortgages<\/li>\r\n \t<li>Holiday lets<\/li>\r\n \t<li>Overseas buy to lets<\/li>\r\n \t<li>Buy to sell mortgages<\/li>\r\n<\/ul>\r\n<span style="font-weight: 400;">[box type="shadow"]\r\n<\/span>All of the above are investment property mortgages, and within these categories are dozens of sub-categories. For example, <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/hmo-mortgages\/">HMO mortgages<\/a> and portfolio agreements are offshoots of buy to let, while commercial mortgages could include finance for offices, <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/commercial-mortgages-for-retail\/">shops<\/a>, factories and more. A broker who specialises in mortgages for investment properties will be able to tell you exactly what type of finance you need to apply for and help you find the best deal for it.\r\n[\/box]\r\n\r\nOne distinction we need to make at this point is the difference between second home and investment property mortgages, as they are by no means one and the same.\r\n<h3>Second home vs. investment property mortgages<\/h3>\r\n<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/2nd-home-mortgages\/">Second home mortgages<\/a> are a completely different product category to mortgages on investment property. The main thing setting them apart is that second home mortgages are residential and can be used to buy properties that are intended for personal use. This includes <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/holiday-lets\/">holiday homes<\/a> and secondary residences that you might live in part time.\r\n\r\nYou wouldn\u2019t use a second home mortgage to buy investment property because they\u2019re residential loans which cannot be used for properties the buyer isn\u2019t planning to live in.\r\n<h3>Can you get a second mortgage for rental property?<\/h3>\r\nYes, in the sense that getting a second mortgage for an investment property in addition to a main residential mortgage is possible. In fact, some investment mortgage lenders might insist that you already have a mortgage, as there are buy-to-let providers who won\u2019t lend to anyone who hasn\u2019t been paying a residential mortgage for a set amount of time.\r\n\r\nTo avoid any confusion around the terminology we\u2019re using here, this example refers to taking out an investment mortgage <b>in addition to<\/b> an existing residential mortgage. The investment mortgage would be a second mortgage, but it wouldn\u2019t be a second <b>home<\/b> mortgage, as they are a product category in their own right, and an entirely different kettle of fish.\r\n<h2 id="how-to-get">How to get a mortgage for an investment property<\/h2>\r\nThe process will differ greatly depending on the type of investment property you\u2019ve got your eye on. There are two important steps you should take to start your journey\u2026<b><\/b>\r\n<ul>\r\n \t<li><b>Do your research: <\/b>Read up on the rules and criteria for the type of investment you\u2019re looking at. You can find summaries below and more details in the standalone guides we\u2019ve linked to. Doing some homework will give you an idea of the documents you\u2019ll need and the lender requirements you will need to meet to gain approval.<\/li>\r\n \t<li><a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-buy-to-let-specialist"><b>Speak to a broker who specialises in securing finance for investment properties: <\/b><\/a>This is essential if you want to get the right advice and the best deal on your investment mortgage. Speaking to the right mortgage broker before you proceed will put you in good stead for your application.<\/li>\r\n<\/ul>\r\n<h3>Buy-to-let mortgages<\/h3>\r\nTo get a buy-to-let mortgage, the main thing you will need is a viable investment and a way to evidence this to the mortgage lender. <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/buy-to-let-mortgage-lenders\/">Buy-to-let mortgage providers<\/a> largely base their eligibility criteria on the property\u2019s rental potential, and with most of them, the projected income will need to cover the mortgage payments by at least 125%; even higher than that, in some cases.\r\n\r\nIn addition to the property\u2019s projected rental income, buy-to-let mortgage providers typically base their lending decision on the following factors\u2026<b><\/b>\r\n<ul>\r\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/deposits\/buy-to-let-deposits\/"><b>Deposit<\/b><\/a><b>: <\/b>The absolute minimum you\u2019re likely to need is 15% of the property\u2019s value, but some lenders ask for more, especially if there\u2019s any risk involved<\/li>\r\n \t<li><b>Credit history: <\/b>The cleaner your credit report, the better, although there are specialist lenders for customers with various types of <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/buy-to-let-mortgage-bad-credit">bad credit<\/a> on their files.<\/li>\r\n \t<li><b>Income and outgoings: <\/b>Some lenders have no minimum income requirements for a BTL, but others won\u2019t lend to anyone earning less than \u00a325,000. Most providers will also factor any significant outgoings you have into their affordability calculations.<\/li>\r\n \t<li><b>Landlord experience: <\/b>Although some BTL lenders are willing to offer mortgages to first-time landlords, having landlord experience will usually strengthen your case.<\/li>\r\n<\/ul>\r\nThese are the main variables the lender will look at if you\u2019re applying for a buy-to-let mortgage, but you can read about the full criteria in our <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/">complete guide to buy-to-let mortgages<\/a>.\r\n<h3>Commercial investment mortgages<\/h3>\r\nThe main criteria for investment mortgages on commercial property is as follows\u2026<b><\/b>\r\n<ul>\r\n \t<li><b>Viability of the investment: <\/b>Commercial investment mortgages can be more flexible than standard buy-to-lets as this sector is unregulated, meaning that lenders can judge applications on a case-by-case basis. The viability of the investment is the main factor here, backed up by a solid business plan. Some lenders also like to see that you have a strong track record in the relevant industry, though this isn\u2019t alway essential.<\/li>\r\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/commercial-mortgage-deposit\/"><b>Deposit<\/b><\/a><b>: <\/b>Requirements are usually higher for commercial investment mortgages, and you can expect the lender to ask you for anywhere between 25-50%.<\/li>\r\n \t<li><b>Credit history: <\/b>Having clean credit might give you a better chance of landing the best rates but, due to the extra flexibility in the commercial sector, there are often lending options for commercial investment borrowers with various types of adverse credit.<\/li>\r\n<\/ul>\r\nYou can read about the full criteria for commercial investment mortgages and the steps you need to take to apply for one in our <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/commercial-mortgages-guide\/#how-to">guide to commercial mortgages<\/a>.\r\n<h3>Holiday lets<\/h3>\r\nSimilar to buy-to-let mortgages, investment mortgages for holiday lets often hinge on the projected rental income, with lenders expecting at least 140% coverage. Deposit requirements can also be higher, starting at around 25% at most mortgage lenders.\r\n\r\n<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/holiday-lets\/">Read more about the requirements and criteria for holiday let mortgages<\/a> in our complete guide.\r\n<h3>Overseas buy to lets<\/h3>\r\nLike holiday lets, overseas investment mortgages are another offshoot of buy-to-let, so the rules and criteria around them are similar; but keep in mind that deposit requirements and rental income requirements can vary depending on which country you\u2019re buying.\r\n\r\nOther variables to be aware of include the tax implications of investing in specific territories, whether planning permission is needed and how the local exchange rate could affect your investment. You might even need to enlist the help of a local letting agent to find tenants.\r\n\r\n<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/overseas-mortgages\/overseas-buy-to-let-mortgages\/">Read more about the requirements for overseas buy to let mortgages<\/a> in our standalone guide.\r\n<h3>Buy to sell mortgages<\/h3>\r\nBuy to sell mortgages allow you to purchase a property that you intend to renovate and sell for a profit. Although they can be used for investment purposes, they\u2019re essentially residential mortgages with much shorter terms, usually ranging from a few months to several years.\r\n\r\nYou can read more about your potential <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/buy-to-sell-mortgages\/">buy to sell mortgage options<\/a> in our standalone guide.\r\n<h3>Why you should start by speaking to an investment mortgage broker<\/h3>\r\nThe best way to kickstart an investment mortgage application is by speaking to a broker who specialises in the type of finance you\u2019re looking for. In our broker network, there are commercial mortgage experts, buy-to-let specialists, holiday let advisors and brokers whose bread and butter is overseas property. Whatever type of investment you\u2019re planning to make, we can find you a mortgage broker who advises in that field every single day.\r\n\r\nAn investment mortgage broker will know exactly which lenders are best positioned to offer favourable rates to a customer with your needs and circumstances, so you can rest assured that you\u2019ll find the right one first time and end up with the best possible deal.\r\n\r\nA broker will search the entire market for you, tracking down every product that meets your specifications, offer you bespoke advice throughout and help you with the paperwork.\r\n\r\nSince the market is so vast, attempting to navigate it without the expertise of an investment mortgage broker could mean you end up paying more for your mortgage, waste time looking for the right product and are left with unnecessary marks on your credit report.\r\n<h2 id="rates">Mortgages rates for investment properties<\/h2>\r\nInterest rates for investment mortgages are typically higher than mortgages for residential properties of equivalent size and value. Generally speaking, BTL mortgage rates can be up to 1% higher than comparable residential products and fees can be higher as well.\r\n\r\nRates for commercial mortgages are always bespoke and calculated by the lender based on the level of risk the deal carries. To work out how much risk there is, they will look at the amount of deposit you have, your credit report, your trading history and the type of property you\u2019re buying.\r\n\r\nGetting the best rates on an investment mortgage is a case of having access to as many lenders as possible and meeting their eligibility criteria down to a tee. Working with a mortgage broker who specialises in investment properties can dramatically increase your chances of landing the best rates, as they have access to every lender on the market and can offer you advice about hope to optimise your credit report and boost your general eligibility.\r\n<h3>Second home vs. investment property rates<\/h3>\r\nMortgage rates for a buy-to-let property are typically higher than they would be for a residential mortgage on a second home of equivalent size and value. This is because mortgage lenders generally believe the risk of a default is higher when there are tenants involved, especially if there is a possibility of rental void periods where the property could be empty.\r\n<h2 id="alternatives">Investment mortgage alternatives<\/h2>\r\nThere are other ways that you could potentially raise funds to buy an investment property besides taking out a mortgage, and they would typically include\u2026<b><\/b>\r\n<ul>\r\n \t<li><b>Remortgaging properties you already own: <\/b>Depending on how much equity you hold in other properties, <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/remortgages\/remortgage-guide\/">remortgaging<\/a> one or more of them could free up enough capital to buy a new investment property outright, or at least put towards it. Landlords with large property portfolios often use this method to grow their business.<\/li>\r\n \t<li><b>Bridging loans: <\/b>If you need to buy an investment property quickly, a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/bridging-finance\/">bridging loan<\/a> could provide fast funds to complete the purchase. You could later remortgage onto an investment mortgage to pay off the debt at the end of the term.<\/li>\r\n \t<li><b>Second charge mortgages: <\/b>It may be possible to secure a <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/second-charge-mortgages\/">second charge mortgage<\/a> against any properties you already own, providing you meet the lender\u2019s criteria and have enough equity. This might be an option for borrowers who don\u2019t meet the criteria for an investment mortgage, but do qualify for a second charge mortgage.<\/li>\r\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/development-finance\/"><b>Development finance<\/b><\/a><b>: <\/b>Only an option if you have the means and knowhow to build your own investment property from scratch, or oversee its construction. This would likely involve remortgaging onto a traditional investment mortgage further down the line.<\/li>\r\n<\/ul>\r\nWhether you should choose one of these options over an investment mortgage is a question to put to a mortgage broker. They will be able to go through each alternative with you, weighing up and pros and cons, to help you make an informed decision about your property investment.\r\n<h2 id="experts">Need a mortgage for an investment property? Get help from an expert!<\/h2>\r\nNeed advice about investment property mortgages? We offer a free broker-matching service that will take your needs, circumstances and investment type into account to pair you up with the right expert for the job. Speaking to the right broker before you apply for your mortgage could mean saving time, money and potential disappointment in the long run.\r\n\r\nIf you\u2019re looking for a rental property, we\u2019ll introduce you to a specialist buy-to-let broker, and if you\u2019re in the market for a commercial property, our broker-matching service will pick out a business mortgage broker who helps customers just like you every day.\r\n\r\nCall 0808 189 2301 or <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-buy-to-let-specialist">make an enquiry<\/a> and we\u2019ll arrange a free, no-obligation chat between you and your perfect investment broker today.\r\n<h2 id="faqs">FAQs<\/h2>\r\nGot a question about investment property mortgages that we haven\u2019t covered so far? Take a look through our FAQ section to find out whether your query is included.\r\n<h3>How many investment property mortgages can I have?<\/h3>\r\nIn theory, there is no strict limit since there are lenders who cater for portfolio landlords with an unlimited number of properties on their books. That said, other lenders do impose some restrictions and might limit either the total number of BTL mortgages they\u2019re willing to offer to one applicant, or the total amount one applicant can borrow for their portfolio.\r\n\r\nThe typical cap for buy-to-let mortgages can be anywhere between three and 10 properties, while maximum borrowing for one application can be around \u00a33 million.\r\n\r\nIf you\u2019ve looking to take out investment mortgages for a large number of properties, your best bet is to work with a specialist buy-to-let mortgage broker who can help you find a lender with no limit on the number of properties they\u2019re willing to offer finance for.\r\n<h3>Can I get a second mortgage on my rental property?<\/h3>\r\nYes, getting a 2nd mortgage for an investment property you\u2019ve already secured a buy-to-let mortgage against is possible, as long as you hold enough equity in the property and the lender is convinced your rental income is high enough to cover both debts secured on the BTL.\r\n\r\nThis is known as a second charge buy-to-let mortgage and the debt you\u2019d take on would sit behind any mortgages you already have on the property. This means that the second charge mortgage lender would be second in line for any proceeds that come from a sale of the property, in the event that it has to be repossessed and offloaded to clear the outstanding debts.\r\n<h4>How to get a second mortgage for a rental property<\/h4>\r\nHead over to our dedicated <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/second-charge-mortgages\/second-charge-buy-to-let-mortgage\/">second charge buy-to-let mortgages guide<\/a> to read up on the eligibility criteria for these products, how to apply and how to get the right advice.\r\n<h3>Can I get a mortgage to buy a second investment property?<\/h3>\r\nYes. Many investment mortgage lenders are willing to offer more than one investment mortgage to the same borrower, as long as they can prove they\u2019ll be earning enough income to cover all of the mortgages they\u2019ve taken out. There are even mortgage lenders and brokers who specialise in people with multiple investment properties, known as portfolio landlords.\r\n\r\nYou can read more in our <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/buy-to-let-portfolio-mortgages-uk\/">guide to portfolio mortgages<\/a>.