Don't Conform With a Buy To Let Mortgage, Have You Considered a Let To Buy Mortgage Instead?

If you get a new job that is quite a distance from your home, or you want to send your children to a school that's not close enough to home and don't want to sell your home, what options are available? Let to buy mortgages are one of them.

So the question you're asking is, why not just go for a buy to let? Many reasons, you might not want to sell your existing house for whatever reason, but have to move because of work or a new child in the family. But at the same time keep the same house as a back up or even as a long term investment.

How Do Let To Buy Mortgages Work? When applying for a let to buy mortgage, the lender will work out what they are prepared to lend you based on your income and outgoings without taking your existing mortgage into account. Lenders often make the assumption that the rent you will receive from letting your existing home will cover the mortgage payments.

What Are Let To Buy Mortgages All About? The bank will assume that your existing mortgage repayments will be covered by the rental income earned from the tenants, so they will assess your affordability for the new mortgage without taking the existing one into account.

What Interest Rates Do Let To Buy Mortgages Offer? Let to buy rates have hovered at around the 5 per cent mark but there is soon likely to be an increase. Monetary Policy Committee of the Bank of England has made it clear that although there has been no rise recently in the base rate of interest, there is likely to be one in the next six months.

What Does the Lender Require? Both the new property and the original one would have to be surveyed to get valuations on them both. The value of rental income potential would also need to be determined for the existing property to ensure that it will cover the mortgage repayments.

A let to buy mortgage can help you move home without being forced to sell your existing property. For example, you may have to relocate with your work, but not want to sell your home in a depressed property market.

If you also have budding dreams of creating a little property empire and portfolio of your own, then let to buy can be a very good first option and step on the path to this road. With house prices set to fall this year for the first time in over a decade, the time to begin a portfolio isn't going to get any better than this.

When considering a let to buy mortgage, bear in mind that you may need consent from your current mortgage lender to rent out your home. Some lenders will charge a fee for agreeing this, whilst others may increase your interest rate if you are not living in the property.

If your current property is a 'leasehold' property, you may also require permission from the leaseholder to let your home. Again, it may be worth seeking advice from a professional before making any firm decisions about let to buy finance.


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Timothy Frodsham writes for Just Commercial Mortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.