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Let-to-buy mortgages

Let to buy

If you want to move house but you’re struggling to sell your current home or your property has dropped in value, let to buy is something you may want to consider, view our let to buy step-by-step guide. Letting out your property could allow you to move into a new home without feeling pressure to sell in a rush and potentially at a loss.

How does let to buy work?

If you own enough of the equity in your property, you could remortgage and release some cash to put down a deposit on a new home. You would then let out your existing property and use the rental income to cover the cost of the mortgage. This in turn will free you up to take out a mortgage for a new home and cover the repayments with your salary or other sources of income.

Mortgages if you want to Let to buy

Although some lenders will allow you to let out your home on a residential mortgage, this will normally only be on a temporary basis. So unless you are only going to be letting it out for a short time, it is likely you will need a buy to let mortgage.

Buy to let mortgages are similar to residential loans, but there are some differences which our advisers will be happy to talk you through. Generally, buy to let mortgage rates tend to be a little more expensive than residential loans, and you will need to put down a larger deposit, at least 25%. Make sure you compare the best buy to let mortgage rates on the market.

Lenders will also want to see evidence that your rental income will comfortably cover your mortgage repayments. Speaking to letting agents and looking at local property listings should give you an idea of typical rents in your area. You can also use our mortgage repayment calculator to get an idea of your monthly mortgage payments may be.

Being a landlord is not right for everyone, and entering into a let to buy arrangement should not be taken lightly. But if you’re confident you will get a decent rental income and can manage the responsibilities of letting out a property it’s worth thinking about. Our buy to let calculator gives you a rough of what you could borrow on a buy to let basis using expect rental income and property value.

Other mortgage options if you can’t sell

If you are struggling to find a buyer and you don’t need to move, then it may also be worth considering staying put for now and investing some money in improving your current home. You could perhaps add an extension, redecorate or make changes to the garden.

Depending on your circumstances, you may be able to fund these changes through remortgaging your current property. Our advisers can help you to decide if this is the right option for you.

Check affordability

How much can I borrow? Stamp duty calculator Mortgage repayment calculator
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