What is a let to buy mortgage?

Let to buy is a process that helps you move house if you’re struggling to or don’t want to sell your current property. There are a number of circumstances when let to buy can be a suitable option for home owners. Perhaps your current house has dropped in value, or you need to move quickly and the market isn’t moving as fast as you need it to.

How do let to buy mortgages work?

With let to buy you convert the residential mortgage on your current home to a buy-to-let mortgage and release equity that can be used to purchase a new home. By releasing equity and converting to a rental property you free yourself from the property chain, allowing you to move and purchase a new home, with a new residential mortgage, much faster.


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What do I need to be aware of when converting the residential mortgage on my current home to a buy-to-let mortgage?

Before proceeding with converting your current residential mortgage to a buy-to-let mortgage, it’s important to understand the differences between the two mortgage types.

Buy-to-let mortgages are similar to residential loans, but there are minor differences you should be aware of. Generally, buy-to-let mortgage rates are higher than residential mortgages, and it’s likely that you will need to have a loan-to-value ratio of at least 75%. When converting your current home to a rental property, the lender will want to see evidence that the rental income from your property will comfortably cover the mortgage repayments when it is converted to buy-to-let. It’s therefore a good idea to speak with local letting agents or look at local property listings to give you an idea of the monthly rents for similar properties in your area.

It’s also important to consider the implications of being a landlord. There are a number of important considerations to make before entering into the buy to let market; such as the legal implications, insurance responsibilities, property maintenance and mortgages are all aspects which need to be planned ahead of time.

How is the process of converting to a buy to let property and getting a new residential mortgage managed?

When proceeding with the let to buy process the rental and residential mortgages are arranged at the same time. This means the lender or lenders are both aware of your current and future property purchase.

It’s important to understand that let to buy transactions are more complex than standard residential mortgages or buy to let mortgages. This is because applying for two mortgages at once is complex and the process needs to be managed as a whole to avoid hold ups.

Seeking specialist advice from an independent mortgage adviser like John Charcol is important. Our experts are here to offer you the best advice and guide you through the whole process.

How can John Charcol help with Let to Buy Mortgages?

We save you the hassle

Our highly trained, professional advisers work with you every step of the way to make the let to buy mortgage application process simple, saving you time, effort and unnecessary stress.

We’re independent

Going direct to a high street lender, such as a bank or building society can limit your ability to achieve the best deal. At John Charcol we have access to products from the whole of the mortgage market, which means we are better placed to find you the best product for your individual needs.

We’re experienced

We’ve been arranging mortgages since 1974 and understand the intricacies of the mortgage market and factors that influence it. Every client has different circumstances and our service is designed to help you achieve your goals.

Frequently asked questions

How much deposit do you need for a let to buy mortgage?

With let to buy you convert the residential mortgage on your current home to a buy-to-let mortgage and release equity that can be used to purchase a new home. A deposit for a buy-to-let is around 25% of the property value.

What is the difference between a buy-to-let and a let to buy mortgage?

A buy-to-let mortgage is where you buy a property with the intention of renting it out to tenants. Whilst a let to buy mortgage is where you would let your property with the intention to purchase a new residential property. It might suit those who can't sell their property at the price they are looking for.

Is there more information on let to buy?

We offer advice for every type of buyer, you can either call us 0344 346 3672 or alternatively you can see what others have been asking our experts about let to buy.

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