Let to Buy Mortgages
Let to buy mortgages allow homeowners to keep their current home as a rental property while buying a new property to live in. At Jones & Young, we regularly help homeowners structure let to buy mortgages, allowing them to move forward without selling their existing home. For people who want to generate rental income from an existing home while taking out a new residential mortgage.
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What Is a Let to Buy Mortgage?
A let to buy mortgage allows you to rent out your current home and purchase a new residential property to live in.
In practice, this means changing the mortgage on your existing property to a buy to let mortgage, while taking out a new residential mortgage on the new home.
A let to buy arrangement means you keep your existing home as a rental property, earn rent, and manage two mortgages at the same time. It can suit people moving for work, buying with a partner, or planning to return to their original property in the future.
What Lenders Look For in a Let-to-Buy Application?
At Jones & Young, we help clients understand what mortgage lenders typically assess during a let to buy application. When reviewing specialist mortgages such as let to buy, most lenders typically look at a few key areas before making a decision:
Rental income – The expected rent from the existing property usually needs to cover the mortgage repayments, often at a set percentage
Affordability for the new residential mortgage – Lenders will check your personal income to ensure you can afford payments on the new home
Equity in the current property – Enough equity is often required to move onto a buy to let mortgage
Credit checks – Standard checks apply under each mortgage lender’s lending criteria
How Jones & Young Can Help?
Here at Jones & Young, we support clients through every stage of a let to buy arrangement, helping you move from one home to two properties with confidence. Our team can help with:
Checking eligibility – Reviewing your current home, rental income, and equity to see if let to buy is suitable
Choosing the right mortgage products – Accessing a range of let to buy mortgages and options from specialist lenders
Managing two applications – Handling both the buy to let mortgage on your existing property and the new residential mortgage
Ongoing support – Coordinating with each mortgage lender and keeping your application on track
We aim to make the process clearer and help you secure a mortgage deal that fits your plans.
Specialist Mortgage Advice for Let to Buy Arrangements
75-80% Loan to Value (LTV)
Loan to Value(LTV) options typically 75 - 80%
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Rental income considered
In many cases, rental income is used to assess affordability for buy to let lending.
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Reasons to Consider Let to Buy:
Let to buy can be a useful option if you are:
Struggling to sell your current home but want to move forward with an onward purchase
Looking to generate rent from an existing property to help cover mortgage repayments
Planning a move for work, a new job, or a change in personal circumstances
Holding onto a property as a long term investment while buying a new home
It is important to consider landlord responsibilities, possible rental voids, and affordability checks, as most lenders will assess both mortgages before approving a let to buy mortgage.
When it comes to purchasing a new house, A let to buy mortgage offers an alternative to selling your current home before buying another. It can allow you to move forward with a purchase without waiting for your existing property to sell.
You have the option to withdraw equity from your current property and use it as a deposit on another property.
You can keep both properties in your portfolio.
How Does Let to Buy Work?
A let to buy mortgage allows you to rent out your current home and buy a new property to live in. This usually involves changing the mortgage on your existing home and taking out a new residential mortgage at the same time.
In most cases:
- You move your current property onto a buy to let mortgage
- You take out a new residential mortgage on the new home
- You manage two mortgages at once
- Rent from the existing home helps cover the mortgage repayments
How the Let to Buy Remortgage Works?
To rent out your current home, it is remortgaged on a let to buy basis. Many homeowners remortgage for more than the remaining loan amount to release equity, which can be used as a cash deposit for the new property.
Affordability for this mortgage is mainly based on:
Expected rental income
Property value
The mortgage lender’s lending criteria
How the Residential Mortgage Works?
For the new home, lenders assess your personal income to decide how much you can borrow. They also consider how the let to buy mortgage affects your overall finances, including existing commitments and mortgage payments.
This helps lenders confirm you can afford both mortgages over the full mortgage term.
How Is Let to Buy Different From Buy to Let?
Buy to let is used when you purchase a property purely as a rental property. Let to buy is different, as it involves refinancing an existing home rather than buying a new rental from scratch.
Key differences include:
- Let to buy uses your current home as the rental property
- The mortgage on that home becomes a buy to let mortgage
- A new residential mortgage is taken for the new house
- The let to buy arrangement supports an onward purchase
Let to Buy and Consent to Let
If your current home still has a standard residential mortgage, you cannot usually rent it out without approval. Some lenders may offer consent to let instead of a full remortgage.
Consent to let means:
You receive the lender’s permission to rent out the property
It is often temporary, commonly 6 to 12 months
Conditions may apply, such as moving back or selling later
Not all mortgage lenders offer consent to let, and it may not suit long term plans. For many homeowners, switching to a buy to let mortgage through a let to buy arrangement is a more suitable option.
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Read What Our Recent Clients Say About Our Let to Buy Mortgage Broker Service
Related Articles For Let to Buy Mortgages
What Do Mortgage Lenders Look For? The Complete Guide
Let to Buy for Mortgage FAQs:
At Jones & Young, we’ve done our best to try and answer some of the most frequently asked questions about let to buy mortgages:
What are the benefits of a let to buy mortgage?
A let to buy mortgage can help you move home without selling your existing home straight away. It may allow you to keep a residential home as a rental property, generate rent, and continue moving up the property ladder, even when house prices or the housing market make selling less appealing.
Do I have to pay stamp duty on a let to buy mortgage?
Yes, in most cases you will need to pay stamp duty when buying a new home while keeping your existing home. This often includes the higher rate and may involve stamp duty land tax if the purchase counts as a second property.
How much stamp duty will I pay on a let to buy purchase?
How much stamp duty you pay depends on the property value, whether the new purchase is an additional property, and current tax thresholds. Many buyers need to pay stamp duty at the higher rate while they own two properties at the same time. You can check potential costs using our stamp duty calculator.
Does let to buy work if my property is sold subject to contract?
Yes, let to buy can sometimes help if your current property is sold subject to contract but the sale is delayed or falls through. This can reduce pressure from a property chain and allow you to move forward.
Can I use the same lender for both mortgages?
Some borrowers can use the same lender for both the let to buy mortgage and the new residential mortgage, but this is not always available. Many lenders apply different rules, so comparing options can be helpful.
Is there a minimum age or age limits for let to buy mortgages?
Most lenders apply minimum age requirements and age limits this is normally minimum age of 18 and maximum 40 year term.. These limits vary between lenders, so it is important to check early when planning a let to buy arrangement.
Do I need a letting agent for my existing home?
You do not have to use a letting agent, but many people choose one to help manage tenants, rent, and legal responsibilities. This can be useful if you are renting out a residential home for the first time.
Can let to buy help if I still have a current mortgage?
Yes, let to buy is often used by homeowners who still have a current mortgage on their existing property. The mortgage is usually changed to a buy to let basis while a new mortgage is taken on the new home.
