Portfolio landlord mortgage guide

What is a portfolio landlord?

Portfolio landlords are people with four or more mortgaged buy-to-let properties. The definition comes from the Prudential Regulation Authority’s buy-to-let underwriting standards, which ask lenders to assess portfolio landlords on their whole portfolio rather than just the property being financed. Certain lenders also class properties you own outright as part of your portfolio.

Your own home doesn’t count, because it’s on a residential mortgage. Every property you own, mortgaged or not, will still be asked about as part of the assessment.

Our buy-to-let mortgages page and buy-to-let guide cover the basics of buy-to-let lending, such as rental cover and deposits.

What do we need to know about your portfolio?

To find a lender whose criteria fit, we need the details of every property you own: its value, the mortgage balance, the lender, the monthly payment and the rent. How the properties are owned, your personal income and your plans matter too. With the full picture, we can match you with the right lenders.

Criteria vary from lender to lender, so once we know your situation, we look for the lenders whose criteria fit you.

How do lenders assess portfolio landlords?

Lenders assess your whole portfolio, as well as the property being financed. That includes the rent and mortgage payments across all your properties, your overall borrowing compared with the portfolio’s value, your experience as a landlord and your personal income. Each lender has its own way of weighing these up.

The new property still needs to pass the lender’s rental cover test, where the rent usually needs to cover the mortgage payment by 125% to 145% at a stress rate the lender sets. Alongside that, the performance of your existing portfolio is reviewed as a whole.

Limits on the number of properties, or the total amount lent to one landlord, are set by some lenders too.

What is a property schedule?

A property schedule is a list of every property you own, showing the address, value, mortgage balance, lender, monthly mortgage payment and monthly rent for each one. Lenders use it to see your whole portfolio at a glance, and most ask for one when you apply as a portfolio landlord.

Keeping your schedule up to date, with accurate values and rents, means applications can move quickly when you find your next property. A few lenders have their own template, and we can help you put yours together.

Do portfolio landlords need a business plan?

Some lenders ask for one. A landlord’s business plan usually explains your experience, how your properties are managed, your strategy and your plans for the next few years. It doesn’t need to be long, and what it should include varies between lenders, so we’ll check what’s needed before you apply.

You may also be asked for a cash flow forecast or a statement of your assets and liabilities, showing your income, outgoings and borrowing across the portfolio.

Can you release equity to grow your portfolio?

Yes, releasing equity to grow a portfolio is common, subject to each lender's individual criteria. Many portfolio landlords remortgage one or more properties to raise a deposit for their next purchase, with the rent, loan-to-value and your whole portfolio all taken into account.

Releasing equity increases your borrowing, so the property being refinanced still needs to pass the rental cover test at the higher loan amount.

Can you hold properties in your own name and a limited company?

Yes. Plenty of landlords hold some properties in their own name and some in a limited company. All the properties you own or are connected to are taken into account, and lenders differ in how they treat portfolios held across personal and company ownership.

Moving existing properties into a limited company usually means a sale to the company, with a new mortgage, legal work and possible tax costs. Our limited company buy-to-let page explains how company buy-to-let works.

Can portfolio landlords get a mortgage with bad credit?

Yes, it's still possible as a portfolio landlord, but it all depends on your credit profile. Your credit history is looked at alongside your whole portfolio, including any missed payments or arrears on your existing mortgages, so we need the details of both.

Our bad credit mortgage guide covers each type of credit issue and what lenders look at.

What documents do portfolio landlords need?

Most lenders ask for a property schedule, proof of your personal income, recent bank statements, photo ID and proof of address. Many also ask for tenancy agreements, recent mortgage statements, a business plan or cash flow forecast, and company documents if any properties are held in a limited company. Requirements depend on the lender.

How does a portfolio landlord mortgage work, step by step?

There are usually six steps to a portfolio landlord mortgage: update your property schedule, talk through your plans with an adviser, match your portfolio to lenders whose criteria fit, get a mortgage in principle, make the full application with any business plan or cash flow forecast, then receive your mortgage offer.

1. Update your property scheduleCurrent values, mortgage balances, payments and rents for every property you own.
2. Talk through your plansA free call with Harry or Lois about what you’re buying or refinancing and where the portfolio is heading.
3. Match your portfolio to lendersWe look at how each lender assesses portfolios and which lenders’ criteria fit yours.
4. Get a mortgage in principleA lender’s initial indication of what it could lend for the new purchase or refinance.
5. Full applicationWe submit your application with your schedule and documents, and the lender values the property.
6. Mortgage offerOnce the lender has checked everything, your mortgage offer is issued and the legal work is completed.

Portfolio landlord questions, answered