Consumer v investment buy-to-let
An investment buy-to-let mortgage will be offered by lenders for any mortgage to fund a property that is being bought specifically for investment purposes. A consumer buy-to-let mortgage is offered if the property was your main home and you are converting it into an investment property; this might be because you are moving in with your partner or you have inherited another property which you are moving into.
The different mortgage lending criteria
If you have a consumer buy-to-let mortgage, you are considered by lenders to be an amateur landlord; these mortgages are therefore more regulated to give protection to ‘accidental’ landlords. You may therefore have to provide more documentation to secure your mortgage.
If you have an investment buy-to-let mortgage, you are considered to be a professional landlord and so are deemed to know what you are doing – the regulations for investment buy-to-let mortgages are therefore not designed to offer the same level of protection as consumer mortgages do for ‘amateur’ landlords.
However, if you have four properties, you are considered to be a portfolio landlord, which can lead to stricter criteria. Lenders are likely to look across your whole portfolio and assess the aggregate borrowing and income.