Award-Winning Bad Credit Specialist · FCA No. 301173
Let to Buy Mortgage Keep Your Home, Buy Your Next One
Let to Buy lets you remortgage your current home onto a buy-to-let basis, rent it out, and take a new residential mortgage on the property you actually want to live in. It is a popular route for people relocating, upsizing, or keeping a property for the future. Darryl explains exactly how it works.
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How Does a Let to Buy Mortgage Work?
With Let to Buy you end up holding two mortgages: a buy-to-let mortgage on your existing home, and a new residential mortgage on the property you are moving into. Your current home is remortgaged onto buy-to-let terms, rented out legally, and the rental income needs to cover the buy-to-let mortgage payments under the lender's rental coverage test, typically requiring rent to cover 125-145% of the mortgage payment.
Most lenders want to see at least 25% equity in your existing property before it can be released onto a buy-to-let basis, and you will usually need a deposit of at least 10-15% for the new residential property, ideally more. A clean credit history is preferred for Let to Buy, though specialist lenders can be more flexible, which is exactly where Darryl's lender knowledge makes a real difference.
Darryl Dhoffer — The Mortgage Geezer
20+ years in mortgages. Award-winning specialist. Featured in the Daily Express, FT Adviser and The Intermediary. I have helped hundreds of people across the UK who were told no by their bank — and I work with 90+ lenders including specialist adverse credit lenders you will not find on comparison sites.
When you contact me, you speak to me directly. No call centres. No being passed around. I personally review every case and respond within 2 hours.
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Frequently Asked Questions
What is the difference between Let to Buy and standard Buy to Let? ›
Let to Buy specifically refers to converting your existing home into a rental property while simultaneously buying a new residential property to live in. Standard Buy to Let is when you purchase a property purely as an investment, without moving home yourself. The two mortgages run alongside each other in a Let to Buy arrangement.
How much equity do I need in my current home for Let to Buy? ›
Most lenders want to see at least 25% equity in your existing property before they will allow it to be remortgaged onto buy-to-let terms, since the maximum loan-to-value on the buy-to-let element is typically 75%. The exact figure depends on the lender and your wider circumstances.
Will rental income cover my buy-to-let mortgage? ›
Lenders apply a rental coverage test, usually requiring the expected rent to cover between 125% and 145% of the monthly mortgage payment on the buy-to-let property. Darryl can arrange a rental valuation as part of the process to confirm whether your property meets this requirement.
Do I need a deposit for the new property if I'm doing Let to Buy? ›
Yes, you will typically need a deposit of at least 10-15% for your new residential property, though a larger deposit will generally improve your rate options. This deposit is separate from the equity being used to support the buy-to-let mortgage on your existing home.
Are there extra costs with Let to Buy I should know about? ›
Yes. You will usually pay a 3% Stamp Duty surcharge on the new property as it is technically a second home at the point of purchase, though this can be refunded if you sell your original property within 36 months. You will also need to consider landlord responsibilities such as gas safety checks, deposit protection and declaring rental income to HMRC.
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FCA No. 301173
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