Buy to Let Mortgage in Northern Ireland

Are you looking for rental properties to purchase in Northern Ireland? Here’s a guide to help you understand what you need.
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Getting a buy-to-let mortgage in Northern Ireland may seem harder when compared to the rest of the UK, as there are fewer lenders.

However, with the right guidance, you can undoubtedly get a BTL mortgage deal that’s suitable for you. 

But before signing the dotted line, you need to understand how buy to let mortgage in Northern Ireland differ from elsewhere in the UK and what aspects you need to keep in mind.

So, let’s dive right in.

Eligibility Criteria For A Buy To Let Mortgage In Northern Ireland

Buy-to-let mortgages in Northern Ireland have similar rules to those in the rest of the UK, with a few variations. The deposit amount is around 25% (minimum), but some lenders can ask for more.

Other than that, you must keep a few other aspects in mind, as explained below.

1. Location Restrictions

Buy-to-let properties in some rural areas of Northern Ireland have low demand and might sit empty for a large portion of the year. 

As a result, these are classified as high-risk properties and you might find it harder to get a mortgage approved for such properties. 

Even if you do manage to find a lender, it’s likely that the rates and deposits will be higher than usual.

2. Type Of Property

Lenders usually don’t want to approve mortgages for properties that might be classified as non-standard constructions

These might be buildings in rural areas of Northern Ireland that are thatched properties or listed buildings. 

Lenders will also shy away from offering mortgages for HMO properties, so if you’re looking to buy such a property your options will be lesser still. 

And even if your mortgage is approved, you’ll likely need to deal with higher deposits and interest rates in most cases.

3. Experience As Landlord

If you’re a first-time buy-to-let buyer, lenders will be reluctant to give you a mortgage. 

Buyers without previous landlord experience are considered high risk, and hence, lenders shy away from approving their mortgages unless a very high deposit is made.

For these reasons, we recommend partnering with an experienced mortgage broker who can help you get the best deal.

Criteria To Become A Landlord In Northern Ireland

For those of you who want to become landlords in Northern Ireland, here are a few other rules to follow:

1. Landlord Registration Scheme

Northern Ireland landlords must register under the Landlord Registration Scheme and become certified to offer rental properties. 

This report usually contains all information about any rental properties that you own. The cost of getting this registration done is £70, and it needs to be renewed every three years.

2. House Of Multiple Occupation (HMO) Licence

What is HMO Mortgage

If you’re planning to acquire a HMO property, you’ll need a licence from the local authority in the area where your property falls. 

To use your rental property as a holiday let, you must also obtain permission from Tourism Northern Ireland.

Buy-To-Let Mortgage Repayments

Since buy-to-let mortgage repayments are usually interest only, they are lower than residential ones in  some cases because of this. 

This way, you only pay the interest out of your rental income monthly and repay the capital at the end of the loan term.

The amount you must repay each month depends on the amount borrowed, the deposit amount and the interest rates. 

To get an idea, you can use a buy-to-let repayment calculator to calculate the repayment amount. 

Buy to Let Mortgage Lenders In Northern Ireland

Most lenders who operate on the mainland of the UK also offer mortgages in Northern Ireland. The following are some of the popular ones:

  • Natwest
  • Bank of Ireland
  • HSBC

Best Buy-To-Let Areas In Northern Ireland

Best Places for Buy To Let Mortgage in Northern Ireland

The demand for rental properties usually varies by location, so if you’re looking for good returns on your rental property, you’ll need to ensure the area where you’re buying the property has high rental demand and rising rental rates. 

The following are some of the top areas for purchasing buy-to-let properties in Northern Ireland:

  • Belfast
  • Dungannon
  • Omagh
  • Lisburn

These areas offer potentially substantial returns on investment, and demand for rental properties has continuously increased. 

Other locations with high student populations, such as Portrush and Coleraine, offer high rental yields.

Government Schemes For Buy-To-Let Properties In Northern Ireland

Northern Ireland has a government scheme to help property owners known as Rent To Own.

However, this scheme applies only to residential property buyers who intend to reside in the home; it is not for buy-to-let owners.

Frequently Asked Questions (FAQs)

1. Is it possible to get a limited company buy-to-let mortgage in Northern Ireland?

Yes, it is possible. The number of limited company buy-to-let applications has increased after the 2020 changes to UK tax laws pertaining to landlords came into effect. However, not all lenders accept this application, so you must be careful in your choice.

2. What type of insurance is needed for a buy-to-let mortgage?

A landlord’s insurance is the most suitable type for buy-to-let owners. Insurance policies are usually taken to cover property damage and related rental issues.

3. What is the stamp duty in Northern Ireland?

Northern Ireland has a tiered stamp duty structure, which means the amount of duty you pay depends on the property value. Like England and Wales, you’ll need to pay an additional 3% stamp duty for all second and subsequent properties purchased. For first-time buyers, the stamp duty exemption on properties will not apply to buy-to-let properties.

4. Should you get a mortgage broker for getting a buy-to-let mortgage in Northern Ireland?

It’s not mandatory but recommended. Since the number of lenders in Northern Ireland is lower than that of the rest of the UK, an experienced broker can help you select the right lender, draft the application, and ensure it gets approved faster than usual.

**A buy to let mortgage will be secured against your property.

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.

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