Let to Buy Mortgages: Buy a New Home Without Selling
A let-to-buy mortgage allows you to purchase a new home without having to sell your existing property first. It can be an ideal solution if you’re relocating temporarily, struggling with a property chain, or want to keep your current home as a long-term rental investment.
With a let-to-buy arrangement, you rent out your existing property while buying a new home to live in — both transactions happen at the same time.
How Does a Let-to-Buy Mortgage Work?
A let-to-buy setup involves two separate mortgage applications:
- A buy-to-let remortgage on your current property
- A residential mortgage for your new home
Your existing residential mortgage must be switched to a buy-to-let, as renting the property without doing so would breach lender terms.
Any equity released from your current property can often be used as a deposit towards your new home.
Buying Your New Home
Alongside the buy-to-let remortgage, you’ll take out a standard residential mortgage for the property you plan to live in. Most lenders require a minimum 10% deposit, with affordability assessed using your income, outgoings and credit history.
Rental income from your let property is usually taken into account when assessing affordability, which can help strengthen your application.
Is a Let-to-Buy Mortgage Right for You?
A let-to-buy mortgage may be suitable if:
- You’ve found a new home but haven’t sold your current one yet
- You’re moving temporarily and plan to return in the future
- You want to keep your existing property as an investment
- Selling now would mean accepting a loss
Key Things to Know About Let-to-Buy Mortgages
There are a few important points to be aware of:
- You must be purchasing your new home at the same time
- Most lenders have upper age limits, typically between 70 and 75
- As a second property buyer, you’ll usually pay an additional 5% stamp duty surcharge
- The surcharge may be refunded if you sell your original home within three years
Tell us about your mortgage requirements
Speak to a Let-to-Buy Mortgage Specialist
Let-to-buy mortgages can be complex, as they involve two applications and different lender criteria. Working with an experienced mortgage broker can make the process far smoother and help ensure both mortgages are structured correctly.
At FPG Mortgages, we manage the entire process on your behalf and source the most suitable deals for your situation.
Get in touch today to find out whether a let-to-buy mortgage is right for you and take the next step with confidence.