Our Consumer Buy-to-Let Mortgages: What You Need to Know

A consumer buy-to-let (CBTL) mortgage is a buy to let mortgage which falls into a protected category by merit of the borrower’s situation, rather than the product type.

These mortgages are different from standard BTL mortgages because they give an additional layer of protection to ‘accidental landlords’ – those renting out their homes but not for business or investment purposes.

CBTLs are also covered under the Financial Services Compensation Scheme.  

This type of mortgage applies to individuals who:

• Have inherited a property
• Are renting out their previous home to move in with a partner
• Are temporarily relocating but want to keep their property
• Are remortgaging their current main residence on to a BTL mortgage, raising capital to purchase a new main residence.

Whereas, if the applicant already has one or more existing BTL properties in the background, or is transferring the property to a Limited Company/SPV, then it does not qualify as a CBTL and is no longer afforded the additional protection of being FCA regulated.

Not sure if it’s a Consumer BTL? Check out this cheat sheet

Key features of CBTL mortgages:

• CBTL’s offer some of the protections you would associate with Regulated Mortgage Contracts.
• Focus on the owner's circumstances.

Eligibility criteria:

• The client or their family member must have lived in the property at some point.
• The client is not a professional landlord; their main income comes from elsewhere.
• The property is or was their main home.

Benefits:

• More protection than standard buy-to-let mortgages.
• Suitable for those who didn't plan to become landlords.
• FCA regulation provides an added layer of consumer protection.

As part of the underwriting, our processing team will verify that the correct CBTL activities are listed for you or your firm. The mortgage offer documents from us will also specify that this is a consumer buy to let, and notes for the borrower that this mortgage type has an additional layer of regulation.

Requirements of your firm

Under the Mortgage Credit Directive, CBTL mortgages offer some of the protections that are in place for FCA regulated mortgage contracts. However, although carrying this additional layer of protection, CBTLs are not regulated mortgage contracts, but any firm that arranges, lends or administers CBTL mortgages must have the correct activities registered with the FCA.

How we treat Expats at Foundation

Please note that CBTLs will also apply to Expat customers who may wish to re-mortgage their former home, or an inherited property in the UK but have no other BTL properties. in the case of CBTL re-mortgage applications only, we can waive the requirement for Expat applicants to have a UK BTL property in the background.  Expats must still have a UK credit footprint.

When it comes to keying your client's mortgage application on the portal, you will see that there is now a tick box for you to tell us that this is a consumer buy to let (CBTL).

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