Mellow FinancialLet to buy mortgages.
Moving home but want to keep your current one as a rental? We'll set up both mortgages so the move works.
How it works
Two mortgages, one move.
With let to buy, you let out your current home and switch its mortgage to a buy to let. Then you take a new residential mortgage on the home you're moving to.
Sometimes you can port your existing mortgage to the new home and add a top-up with the same lender, avoiding early repayment charges.
Lending is usually up to 75% loan to value on the property you're letting, so you'll need around 25% equity left in it.
Accidental landlords
How many portfolios start.
For many landlords this is how it began. After a few moves they own two or three former homes, now let out.
Homes you've lived in fall under different rules, known as consumer buy to let, and not every lender accepts them. Those that do have strict criteria, so advice matters.
Tax advice is often essential too. The right structure now can pay off later, and inheritance tax planning is best started early.
The Financial Conduct Authority does not regulate some forms of buy to let mortgage. Your property may be repossessed if you do not keep up repayments on your mortgage.
Questions
Frequently asked.
What is a let to buy mortgage?
It lets you rent out your current home and buy a new one to live in. You end up with two mortgages: a buy to let on the old home and a residential mortgage on the new one.
Can I do it if I have a residential mortgage now?
Yes. Your current mortgage needs to change to a buy to let, or you need your lender's consent to let, and you'll need a separate mortgage for your new home. Lenders look at the affordability of both.
How much equity do I need?
Usually at least 25% in the home you're letting out. For the new home, the deposit depends on the mortgage you choose.
Why choose let to buy?
You can move without selling, keep the rental income and any growth in value, and avoid selling into a weak market.
How is the rent assessed?
Lenders usually want the expected rent to cover 125 to 145% of the mortgage payment. They may also look at your personal income.