Let-to-Buy Mortgages Explained

Thinking about moving house but don’t want to sell your current home? Maybe you’re relocating for work, moving in with a partner, or eyeing up a new property but aren’t quite ready to let go of the one you’re in. That’s where let-to-buy can be a helpful option.

Let-to-buy lets you rent out your existing property and use some of its value to help buy your next one. It’s a way to move forward without cutting ties, and it’s more achievable than you might think.

What is Let-to-Buy?

Let-to-buy involves switching your current residential mortgage to a buy-to-let mortgage, so you can rent out the home you’re leaving behind. At the same time, you take out a new residential mortgage on the property you’re buying and plan to live in.

Both mortgages run side by side, and the rental income from your old home helps cover the new buy-to-let payments.

This can be helpful if:

• You don’t want to sell just yet
• You’re struggling to sell but don’t want to lose your new property
• You’d like to keep your existing home as a long-term investment
• You’re moving in with someone and want to keep your own property too

How Does Let-to-Buy Work?

Here’s a simple overview of how it usually works:

1. Remortgage your current home onto a buy-to-let deal
   This allows you to legally rent it out and release some equity if needed.
2. Use that equity as a deposit for your next property
   You’ll still need to meet the affordability checks for the new residential mortgage.
3. Rent out your old home
   The expected rent needs to be enough to cover the buy-to-let mortgage (plus a buffer, more on that below).
4. Move into your new home
   You now have two mortgages: one for the property you’re letting, and one for the one you’re living in.

It might sound complicated, but with the right support, it can be a smooth and strategic way to move forward without letting go of your home.

What Do Lenders Look For?

Let-to-buy isn’t something every lender offers, but many do, especially through brokers. To be eligible, lenders will usually want to see:

• A decent amount of equity in your current home (typically 25% or more)
• Rental income that comfortably covers the new buy-to-let mortgage — usually 125% to 145% of the payment
• A good credit history and proof you can afford the mortgage on the new home
• That you’re planning to live in the new property, not just buying another buy-to-let

What Does It Cost?

Let-to-buy can come with extra costs that are worth budgeting for:

• Stamp duty: If you own two properties at the same time, you’ll usually pay a 3% second-home surcharge. However, if you sell your old home within three years, you may be able to claim a refund.
• Buy-to-let rates: Mortgage interest rates on buy-to-let deals are usually a bit higher than on residential ones.
• Landlord responsibilities: Renting out a home comes with costs like insurance, gas safety checks, and possibly letting agent fees.
• Legal fees: Because you’re dealing with two properties, the legal process can be a bit more involved.

At Lendese, we can talk you through all of this and help you decide if the numbers work in your favour.

Is Let-to-Buy Right for Me?

It might be, but it depends on your goals, finances, and how much equity you have in your current home.

Let-to-buy could work well if:

• You’re relocating but might return
• You want to move quickly without breaking a chain
• You’d prefer to let your current home build value rather than sell it now
• You want to try becoming a landlord without buying an investment property from scratch

It’s not ideal for everyone. If you’re not comfortable managing two mortgages, or if your finances are stretched, it’s worth exploring alternatives too, such as consent-to-let, or a more traditional sale and purchase route.

Can Lendese Help?

Absolutely. Let-to-buy involves two mortgages that need to be set up together, and not all lenders offer them. That’s where we come in.

We’ll walk you through the process, help you understand what you can borrow, and coordinate both sides of the mortgage so everything runs smoothly. We’ll also help you check if the numbers make sense for your short and long-term plans.