Buy-to-Let Mortgage: Is it better to use a broker or do it yourself?

Monday 18th December 2023 | 5 minute read

BTL property

Complicated lending rules and criteria make getting a buy-to-let mortgage yourself confusing. New laws for landlords just make it even messier. 

So it's no surprise that around 75% of buy-to-let mortgages are now arranged through a mortgage broker.

But just because everyone else is doing it, does it mean it’s better to use a broker or would you be better off doing it yourself? That’s what we’re going to answer for you here.

In this article, you’ll learn:

  • What specialist buy-to-let do
  • What commission do mortgage brokers charge
  • The advantages of using a mortgage broker
  • The disadvantages of using a mortgage broker
  • What you should do if you’re thinking of getting a buy-to-let mortgage

Are there specialist buy-to-let mortgage brokers?

When you’re looking at getting a buy-to-let mortgage, you have 2 choices. You can either go direct with a lender or you can use a mortgage broker to help you.

There are mortgage brokers that specialise in buy-to-let mortgages. The brokers will have a solid knowledge of the buy-to-let mortgage rules, criteria, and eligibility. They’ll also have incredible relationships with lenders that specialise in buy-to-let mortgages. So they can often find or negotiate a better deal than going direct too - and that goes for your BTL remortgage too.


What does a buy-to-let mortgage broker do?

A buy-to-let mortgage broker acts as an intermediary between you and the lenders. They’ll ask you some questions to establish your personal and financial circumstances. When they have this information, they’ll know which lenders to approach to get you the best buy-to-let mortgage deals. 

A buy-to-let mortgage broker is likely to ask you these questions before they shop around for buy-to-let mortgage offers on your behalf:

Your income - Most lenders require you to be earning a minimum of £25,000pa

The value of the buy-to-let property - So that they know how much you’ll be looking to borrow

Property details - Period properties, listed buildings, and non-standard constructions often pose a higher risk to lenders. Telling your mortgage broker the property details upfront can help save you time getting quotes from lenders that don't specialise in non-standard buy-to-let properties.

How much deposit you have - Higher deposits can help you get better interest rates. And your mortgage broker will tell you if your deposit amount is too small.

The type of buy-to-let mortgage you’re looking for - Most new landlords opt for interest-only buy-to-let mortgages. This type tends to offer the lowest monthly payments. But your specialist buy-to-let mortgage broker will be able to talk you through the options so you can choose the best mortgage type for your needs.

Your credit history - Your mortgage broker may complete a soft credit history check which will have no impact on your credit score. The lender will undertake a full credit history check only after you’ve submitted your full application.

After they’ve asked you these questions your mortgage broker will begin their search for buy-to-let mortgage offers suitable for your requirements. To save you time sifting through a mountain of offers they do everything for you:


Mortgage brokers research potential lenders 

Your mortgage broker will approach buy-to-let mortgage lenders that can offer good rates and deals for you.


Mortgage brokers find the best offers for you

Next, they’ll go through the offers and narrow down the best ones for you based on your specific requirements. 

There are hundreds of potential buy-to-let mortgage lenders with many individual offers. So based on your requirements from the initial questionnaire, they’ll compile all the offers that suit your needs to present to you.

If you did this yourself, you’d be the one creating the “no” and “maybe” piles.


Mortgage brokers help you complete your buy-to-let mortgage application 

Specialist buy-to-let mortgage brokers know the mortgage application process like the back of their hands. So they will help put your application pack together. 

Over the years, mortgage applications have become more complex. And getting things wrong or missing answers or supporting documents from your application can create delays. So your mortgage broker will help speed up the mortgage application process for you.


Mortgage brokers answer your questions

Going it alone can be daunting. If you’re a new buy-to-let property buyer, you’re probably not a buy-to-let specialist. This means you’ll have a whole heap of questions. And your mortgage broker will help you avoid potential roadblocks that could hinder your application progress.

A mortgage broker is always on hand to support you and answer your questions. You can feel secure in your decisions every step of the way right through to you receiving your finalised mortgage offer from your chosen lender.


What is the commission for a mortgage broker?

All buy-to-let mortgage brokers are different and will have varying charges. But the average commission you pay for using a mortgage broker is between 0.35% and 1% of the value of the lending amount.

For the average property value buy-to-let mortgage this is around £772. This is a small fee to pay in your total buy-to-let mortgage costs.

Our buy-to-let mortgage broker fee is 3% of the loan value.


Advantages of using a buy-to-let mortgage broker

There are many benefits of going with a mortgage broker for your buy-to-let mortgage. Professional buy-to-let experts will help you complete the process in less time. They can often save you money and reduce the stresses you’ll feel at every stage.


Mortgage brokers can find you a better deal

Because of their professional relationships with lenders, they can often find you a better rate and deal than going direct with the lender yourself. Getting special rates you may not be able to get on your own is the main benefit of using a mortgage broker to find your buy-to-let mortgage.


Mortgage brokers search a larger base of lenders

They’re also more likely to know the best lenders for your needs that even an online search wouldn't bring up for you. So they can present deals you otherwise might never see.


Mortgage brokers save you time and stress

Imagine going through hundreds of mortgage offers and separating them into two piles. The "not suitable" pile. And the "maybe" pile. Now imagine taking that "maybe" pile of offers and comparing them. You’d need a spreadsheet and a lot of time.

Buy-to-let mortgage brokers do all this for you. So you see the offers that actually suit your needs and skip the ones that’ll waste your time.


Mortgage brokers speed up the process

As experts in the buy-to-let field, mortgage brokers know all the ins and outs. So they can help you avoid mistakes that delay the mortgage application going through. 


Disadvantages of using a buy-to-let mortgage broker

The benefits of using a buy-to-let mortgage broker far outweigh the disadvantages. But it’s still worth mentioning the downside to using a mortgage broker here so that you can make a fully informed decision.

Unethical brokers

After the real estate market crash in 2008, mortgage brokers' practices were put under the microscope. Many felt they weren’t acting in the best interests of their customers. And this was true in some cases.

The temptation of a higher commission for the broker over what was the best deal for their customers was too much for unethical mortgage brokers. These morally-questionable practices still exist today, although not as often as in previous years. So the best thing you can do is make sure you understand what a mortgage broker does and educate yourself in the finer details of buy-to-let mortgages so you won't be duped by a dodgy mortgage broker.

We make sure to present every suitable offer our selected lenders make to you. We’re here to help you make the best decision. And we’ll never push you towards a specific deal “because it benefits us” as we’re paid in commission by you, not the lenders.

Broker Fees

As mentioned above, your mortgage broker will charge a commission for their service. This is only a disadvantage in that it will cost extra to go through a broker but the financial and time savings are often bigger than the cost.

So what should you do?

If you’re unsure if you should use a buy-to-let mortgage broker, the best thing to do is to talk to one. This keeps your options open and may result in you finding a buy-to-let mortgage deal you otherwise wouldn’t have been able to find. 

Give our experts a call today on 01202 612934 to see how our mortgage brokers can help you find the best buy-to-let mortgage deal.

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