Published 7 March 2016 · Last reviewed 4 September 2018 · Older article — see current rates
Let to Buy Mortgage Advice when your looking to rent your current home often refinance to fund the purchase of another property.
What is Let to Buy Mortgage and how does it all work. It is very common for clients to ask me about retaining their existing property when they are looking to buy a new home.
This is known to mortgage lenders as let to buy or consumer buy to let. This facility is not offered by all lenders so be sure to seek professional mortgage advice from a credit broker such as Niche Advice.
Of the lenders that allow let to buy mortgage solutions most will insist you own the existing property for at least 6 months.
The expected rental income must be at 125% of the mortgage payment and often slightly more to allow for rate rises (stress testing).
The maximum loan to value on the let to buy property is likely to be 75%. For example if the property value is £100,000 the mortgage maximum is £75,000.
If the existing mortgage is less than 75% it could be possible to release funds up to that amount to use towards the deposit on the new property. So to use the example above if the current mortgage on the let to buy is £40,000, £35,000 could be raised for the new deposit.
Previous landlord experience is not normally necessary but may offer the lender greater comfort. Let to Buy Mortgage Market will be going through some changes following the implementation of European Credit Directive Which will try to put in place safeguards for accidental landlords. These changes will mean greater scrutiny of let to buy mortgages specifically around sustainability and affordability of the mortgage.
To get Let to Buy Mortgage Advice (consumer buy to lets) please call and ask for me personally on 020 7993 02044 alternatively complete the online enquiry form on this page.