LET TO BUY

Finance Planning

What is Let to Buy

A Let to Buy mortgage is a type of mortgage that allows a homeowner to rent out their existing property and use the rental income to pay for a new mortgage on a new property. This is often used by homeowners who want to move to a new home but either cannot sell their existing property or want to keep it as a long-term investment. The Let to Buy mortgage allows them to use the rental income to cover the mortgage payments on their existing property while taking out a new mortgage on the new property. This type of mortgage can be complex and may require the assistance of a mortgage broker or financial advisor to navigate

Reasons To Consider a Let to Buy Mortgage

A let to buy mortgage, sometimes referred to as a rent to buy arrangement, offers greater flexibility when you’re looking to purchase a new home.

One key advantage is that it can help you move more quickly by reducing the need to rely on selling your current property first.

By removing the pressure of being part of a traditional property chain, you may be able to secure your new home sooner and enjoy a smoother, less stressful buying process.

It can also allow you to release equity from your existing property, which may be used towards the deposit on your next home.

In addition, if your current property is in a strong rental market, letting it out could provide a reliable income stream.

Managing two properties with mortgages may prove financially beneficial and can also support the growth of a long-term property portfolio.

How Is Let-To-Buy Different From Buy-To-Let?

As noted above, the mortgage used for your existing property under a let to buy arrangement is typically a standard buy-to-let mortgage. The product itself is the same as a traditional buy-to-let mortgage used for purchasing a rental property. “Let to buy” simply describes the overall strategy, where you choose to rent out your current home—often releasing equity from it—to help fund the purchase of your next property.

In contrast, a standard buy-to-let mortgage is arranged when you intend to purchase a property specifically for rental purposes from the outset. With a let to buy approach, you are usually remortgaging your existing home onto a buy-to-let basis, enabling you to let it out while using the equity to support your onward purchase.

Let-To-Buy and Consent to Let

In most cases, you cannot rent out a property that is financed with a standard residential mortgage without first obtaining permission from your lender. To do so without switching to a buy-to-let mortgage, you would need to request consent to let.

Consent to let is an arrangement where your existing mortgage lender agrees to allow you to rent out your home while your current residential mortgage remains in place. Approval is not guaranteed and will depend on your individual circumstances and your lender’s criteria.

Where granted, consent to let is usually temporary, often for a period of 6–12 months. It may also be subject to conditions, such as a requirement that you plan to move back into the property or sell it at the end of the agreed period.

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UR PROPERTY MAY BE REPOSSESSED IF YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON ITYOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.

Amortgageshop is a trading name of Statsis Investments Limited, which is authorised and regulated by the Financial Conduct Authority (FCA No. 305712). Registered in England and Wales No. 04163647. Registered Office: 15 Hermon Hill, London, E11 2AR. We are a mortgage broker and not a lender. We offer mortgages from the whole of the market. We may receive commission from lenders. The amount of commission varies depending on the lender. We may charge admin fee which depend on complexity of the case. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgage. Calls may be recorded for training and monitoring purposes.

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