fbpx

Mortgage Advice Experts

Menu
  • Home
  • Videos
  • Mortgage Calculators
  • Residential
    • Mortgage Deals
    • First Time Buyer
    • Remortgage
    • Right to Buy Mortgage
    • Bad Credit Mortgage
    • Self Employed
    • High Income Multiple
    • Help To Buy Mortgage
    • Gifted Deposit
    • Foreign Nationals
    • Debt Consolidation
    • Equity Release
    • Close
  • Buy to Let
    • Buy to Let Mortgage Deals
    • Buy to Let Tips
    • BTL 80% Loan to value
    • Buy to let Remortgage
    • Let to Buy
    • HMOs
    • Buy to Let with Bad Credit
    • Limited Company
    • Portfolios
    • Holiday Lets
    • Ex Pats
    • Rent to Family Memeber
    • DSS Tenants
    • Into Retirement
    • Foreign Nationals
    • Inherited Property
    • Close
  • Bridging Loans
    • Commercial Mortgage Tips
    • Bridging Loans Explained
    • Why use Bridging Finance
    • Bridging Finance Rates
    • Auction Finance
    • Auction Finance Rates
    • Non Standard Commercials
    • Development Finance
    • Close
  • Protection
    • Will Writing Service
    • Probate Services
    • Close
  • Testimonials
  • About Us
    • Why Niche Advice
    • Our Fees
    • Testimonials
    • Blog
    • Join our Team
    • Privacy Notice
    • Terms and Conditions
    • Close
  • Contact Us
You are here: Home / Mortgages / Let to Buy Mortgage / Let to Buy Mortgage vs Buy to Let Mortgage

by Payam Azadi

Let to Buy Mortgage vs Buy to Let Mortgage

Let to Buy MortgageIf you want to convert your existing property into an investment property, you will need a Let to Buy Mortgage

A Let to Buy Mortgage is basically where the applicant wants to remortgage their existing residential property which will be let out to tenants, and use the equity for a deposit on a totally new residential property. There are lots of changes on the horizon for the Let to Buy properties, especially around income verification, affordability and feasibility of the mortgage. This is because often the applicants are not experienced landlords so are deemed to be at higher risk.

With changes around Mortgage Credit Directive (MCD) and Buy to Let mortgages coming in next year, Let to Buy mortgages will be more scrutinized. This can also be said for other permissions around letting your existing residential property.

The Mortgage Credit Directive, effective 21 March 2016, will introduce a legislative framework for Consumer Buy to Let (CBTL). This covers the small number of Buy to Lets where the borrower has not entered into the mortgage contract for business/investment purposes.

For example, currently you can ask for consent to let from your existing Lender to rent the property if you want to stay with that Lender during your fixed term period, but your contract with that Lender was originally only for residential purposes. Currently some Lenders allow you to rent the property if you are not taking any equity out or changing the term and will give you consent to let, but I think there will be more work done around this topic to protect the clients as well as the Lenders.

So how does Let to Buy differ from a standard Buy to Let Mortgage?

A Buy to Let Mortgage is where a property is going to be purchased or is already owned by the applicant as a rental property. This type of deal falls outside of the standard regulatory guidelines because it is essentially treated as a commercial entity. At the end of the day, the property is not your residential property and you are using it generate income as an investment.

Different Lenders have very different criteria around Let to Buy Mortgages. Some don’t even offer this type of product. Most would only allow a Let to Buy Mortgage if the purchase on the new property was taking place at the same time.

Let to Buy Mortgage Lenders currently have slightly differently criteria around this product, for example, a few Lenders will allow you to let your existing property and move in with family members, where others will say that you must be purchasing another residential property for them to allow you to convert your existing property to let.

See our best Let to Buy Mortgage Products

For more information on getting a Let the Buy Mortgage, please call us on 020 7903 2044 or alternatively complete the online enquiry form on this page.

Payam Azadi

Author: Payam Azadi

Payam Azadi is a partner at Niche Advice who are whole of the market Independent Mortgage Brokers. His role is very much focused on Property financing both on residential and commercial lines. To get in contact with him please click here.

Twitter Facebook Linkedin

Filed Under: Let to Buy Mortgage

Proud to be sponsors

Mortgage broker awards

Contact Us

Our Fees

Why Niche Advice

Mortgage Deals

Tools / Calculators

Latest News / Blog

Payam Azadi

UK Mortgage for Asylum Seekers on a Refugee Visa

Asylum seekers on a refugee visa Mortgage options from the Experts This article is aimed at mortgages for Asylum seekers on a Refugees Visa who are … [Read More...]

Payam Azadi

Mortgage for Foreign Students on a Tier 4 Visa

Mortgage options for Students on a Tier 4 Visa in the UK This article is aimed at foreign students on a Tier 4 Visa who are in the UK who are … [Read More...]

Payam Azadi

Declined Buy to let mortgage due to background property portfolio stress test

The background property portfolio stress test is stopping borrowing more There could be a variety of reasons why you've been turned down for a … [Read More...]

AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

Niche Advice Limited is a Credit Broker and does not lend money directly to clients. Niche Advice Limited is authorised and regulated by the Financial Conduct Authority. FCA Number: 750263.

Commercial Buy-to-Let and commercial mortgages are not regulated by the Financial Conduct Authority.

Our Fees

Click here for our fees structure. A full detailed fee plan will accompany all our quotes.

Niche Advice Limited has a commercial arrangement under an affiliate programme with Check My File and is remunerated for referrals.

Terms and Conditions

If you wish to register a complaint, please write to us on the details below or call us on: 020 7993 2044.

Correspondence Address: Niche, Unit F6, The Addington Business Centre, Vulcan Way, New Addington, Surrey CR0 9UG.

A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234567.

Site Terms and Conditions
Customer Privacy Notice

niche youtube

CONTACT NICHE ADVICE
Tel: 020 7993 2044

Registered Office: Niche, Unit F3, The Addington Business Centre, Vulcan Way, New Addington, Surrey CR0 9UG. Registered in England & Wales. Company registration number: 06599033.

Members of The Financial Intermediary & Broker Association - Number SBS36389

logo

© 2022 · Niche Advice Limited · Site Designed by Niche Advice Design Team

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}