Welcome to Melton’s Buy to Let Hub

Buy to Let Calculator

Type of Buy to Let

Standard Buy to Let – this is where the transaction is purely to generate rental income and yield from an Assured Shorthold Tenancy Agreement, and is non-regulated

Consumer Buy to Let – this is when you have lived in the property as your main residence or you inherit a property that was a main residence and then due to a change in circumstances you choose to let the property and will receive no other rental income

Regulated Buy to Let – this is when you or a member of your family will at some stage be a tenant

Holiday Buy to Let – this is where the transaction is purely to generate rental income and yield from Short Term Letting to Holidaymakers, and is non-regulated

ICR Calculation

The Melton’s standard ICR (Interest Coverage Ratio) calculation is 145% of the mortgage payment, calculated at the Society’s BTL stressed rate on an interest only basis. For details of our current rates, please visit our product guide.

This calculation is reduced to 130% for our Holiday Buy to Let products.

Income Requirements

Applicants must have a minimum earned income amount of £25k. This can be shared between joint applicants. Evidence of income is in accordance with our standard proof of income requirements.

Portfolio & Security

A maximum portfolio of 3 properties in total in mortgage to the Society or any other lender will be allowable to an individual or connected counterparty. The maximum amount that may be lent to any individual or connected counterparty is £500k in aggregate.

Leasehold properties will be considered up to a maximum loan to value of 60%.

The EPC rating for the property must have a minimum of grade E.

Regulated Family Buy to Let

Many landlords who are looking to buy a property to rent to a family member will know it’s not easy, however at The Melton we offer a Family Buy to Let mortgage allowing just that. This mortgage is also available to customers who are intending on letting the property out to non-related tenants in the short term but moving in themselves at a later date.

Holiday Buy to Let

Our Holiday Buy to Let mortgages continue to remain popular, especially due to the fact that we offer a regulated product allowing the applicant(s) to holiday in the property themselves.

Gross rental income must cover the mortgage payment (calculated at the the Society’s BTL stressed rate on an interest only basis) by a minimum of 130%. For the purpose of HBTL, gross rental income shall be;

  • In the case of an existing holiday let (purchase or remortgage), a minimum of one year’s gross rental income verified by an approved accountant, or
  • In the case of a new holiday let, confirmation of potential income and the % occupancy rate are required. These must be based on an average of low, medium and high seasonal data, received from a letting agent with relevant experience in the area of the property taking 80% as a maximum occupancy rate.

The property must be free of any planning restrictions that limits use to holiday home use only.

Details of any company managing and/or marketing the property will be required and the requirement for an assured shorthold tenancy agreement is not applicable.