What’s a portfolio landlord?

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A portfolio landlord is a landlord who owns 4 or more buy-to-let properties that have mortgages on them.

As an example, if you own 6 buy-to-let properties but only 3 of them have mortgages on them, you don’t count as a portfolio landlord. But if you own 6 buy-to-let properties and 4 of them have mortgages on them, you do count as a portfolio landlord.

If you fall under the ‘portfolio landlord’ bracket, it just changes how mortgage lenders assess whether or not they’re happy to give you another buy-to-let mortgage. 

Basically, when you apply for a buy-to-let mortgage, lenders will do something called a ‘stress test,’ where they work out whether your property will generate enough rental income to safely cover your mortgage repayments. However, if you’re a portfolio landlord, you’ll need every property in your portfolio to pass the test before a lender will consider giving you another buy-to-let mortgage.

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If you’re not sure your portfolio will pass the ‘stress test,’ you could find a lender who will let you do something called ‘top-slicing.’ This is where your lender takes your personal income into account and uses it to subsidise any shortfalls in your properties’ earnings.

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