Let To Buy Mortgages

Are you considering a move but lack a buyer or sufficient cash for a new deposit?

Let to buy mortgages, not to be confused with buy to let mortgages, are a solution if you wish to move without selling your current home.

At The Mortgage Choice we have access to a wide range of lenders who will consider using your current property to raise the deposit and can help you navigate through the process.

Understanding let to buy mortgages

A let to buy mortgage involves switching your current residential mortgage to a new let to buy mortgage while simultaneously taking out a new residential mortgage on the property you intend to purchase. These transactions occur at the same time.

Some people also opt to transfer their current homes into Limited Companies and secure let to buy mortgages on them, a decision that comes with its own set of pros and cons. If you are considering this option please get in touch.

Do I qualify for a let to buy mortgage?

Let to buy mortgages offer you a solution if you are looking to move while retaining your current property. To borrow, you must have sufficient equity in your current home to release enough funds for a deposit on a new property, or have savings to cover the purchase. Your current home is then let out on a buy to let basis, with rental income covering the monthly mortgage payments.

How does the application process work for a let to buy mortgage?

The Mortgage Choice has access to the whole of market and can help you apply for a let to buy mortgage and help you secure the best rate for your circumstances.

Your chosen lender will assess your eligibility for both products simultaneously, requiring you to meet affordability criteria and provide adequate deposits for both properties.

What are the eligibility and deposit requirements for a let to buy mortgage?

Eligible candidates for let to buy mortgages typically have a minimum age of 25 and a maximum age of 75, though this can vary by lender. For the new purchase, a 10% deposit is usually required, while a 25% deposit is needed for the remortgage of your current home to a let to buy mortgage. This deposit typically comes from the equity in your existing property, though additional funds can be used to reduce the loan-to-value ratio for better interest rates.

You need to ensure your rental income will cover circa 125%-145% of your let to buy mortgage repayments. Having a good credit score is favourable, although you may also be able to find a lender who will work with you if you have a poor score but interest rates and deposits can be higher.

What are the interest rates and considerations for a let to buy mortgage?

Interest rates for let to buy mortgages are similar to those for buy to let or residential mortgages. However, specialised advice is crucial to ensure you choose the right lenders for your needs. Which is where The Mortgage Choice can help.

Considerations include potential early repayment charges, additional responsibilities as a landlord and tax implications on rental income.

What are the pros of let to buy mortgages?

The moving process is usually less stressful with a let to buy mortgage as you don’t need to have home viewings or find a buyer. You also won’t be stuck in a chain waiting to move so the process is likely to be faster. Owning two properties rather than one could increase your wealth if property prices go up.

What are the cons of let to buy mortgages?

Let to buy products can be more expensive and if the house prices fall, you could lose on both properties. Having two mortgages to service can also be stressful especially if mortgage rates and other costs of living are rising. Having a rental property comes with additional responsibilities as a landlord, such as extra certifications, repair and maintenance costs. Additional stamp duty and income tax on the rent may also be payable, so please seek the right tax advice.

THE MORTGAGE CHOICE CAN HELP YOU FIND THE RIGHT LET TO BUY MORTGAGE.  

Our expertise in let to buy mortgage advice will ensure you find the most suitable product to retain your existing home while acquiring a new residential property, all without the typical stress of moving. Let us guide you through the process and make your property goals a reality.

OUR PROMISE TO YOU

We will carefully assess your personal circumstances, your mortgage requirements and based on this we will make a recommendation giving you the most suitable mortgage advice.

themortgagechoice is located in Byfleet, Surrey. We have clients in Guildford, Woking, Weybridge, Cobham  and across the UK.

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

YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

NOT ALL BUY TO LET MORTGAGES ARE REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.