Let to Buy

  • If you want to move to a new home but don’t want to sell your existing property, a Let to Buy mortgage could be the answer. This specialist mortgage solution allows you to rent out your current home and use it as part of your financial plan for purchasing your next property.

    At J Finance, we help homeowners explore Let to Buy options, weigh up the pros and cons, and find a solution that’s right for their plans and cash flow.

  • A Let to Buy mortgage is a type of financing that lets you:

    1. Convert your current residential mortgage into a rental mortgage, so you can rent out your existing home, and

    2. Take out a new residential mortgage on the property you want to live in.

    In practice, this means you end up with two mortgages — one on the property you’re letting out and one on your new home — and you become a landlord of your former residence as part of your move.

  • Here’s how the Let to Buy process typically works:

    1. You decide to move and find a new property you wish to buy.

    2. Instead of selling your current home, you rent it out to tenants.

    3. You convert the mortgage on your existing home into a Let to Buy mortgage.

    4. You may use any equity released from your current home as part of the deposit for your new property.

    5. You take out a new residential mortgage on the home you want to live in.

    You’ll now be responsible for two mortgage payments — one on the property you’re letting out and one on the home you live in. Albeit the let property should have rental income that covers the mortgage payments.

  • Stay on the Property Ladder

    You keep hold of your existing property as an investment rather than selling it — ideal if you believe its value will continue to grow.

    Avoid Selling in a Slow Market

    If it’s taking longer than expected to sell your home, Let to Buy lets you move without waiting for a buyer.

    Generate Rental Income

    Renting out your existing home can provide an additional income stream to help cover mortgage costs.

    Flexible Future Options

    You can keep the rented property long term, sell it later when timing is better, or use it as part of a future investment strategy.

  • Let to Buy is not suitable for everyone. Important factors to consider include:

    Affordability

    Lenders will assess whether you can afford both mortgages, even if rental income is expected to contribute towards repayments.

    Equity Requirements

    Most lenders require a significant amount of equity in your current property, often around 25% or more, to switch to a Let to Buy mortgage.

    Rental Income Assessment

    Projected rental income is assessed to ensure it sufficiently covers the mortgage costs on the property being let.

    Landlord Responsibilities

    Once your property is rented out, you take on landlord responsibilities, including maintenance, compliance with regulations, managing tenants and covering void periods.

    Tax and Additional Costs

    Rental income may be taxable, and purchasing an additional property can attract higher Stamp Duty charges. Ongoing costs such as insurance, maintenance and letting fees should also be considered.

  • Although they sound similar, Let to Buy and Buy to Let are different:

    • Buy to Let is for purchasing a property specifically as an investment to rent out.

    • Let to Buy is for homeowners who already live in a property and want to rent it out while buying a new home to live in.

    Let to Buy combines moving home with becoming a landlord at the same time.

  • Step 1 – Initial Review

    We assess your current mortgage, equity position, rental potential and plans for your next home.

    Step 2 – Lender Selection

    We identify lenders whose Let to Buy criteria suit your circumstances, including rental income and affordability requirements.

    Step 3 – Application Preparation

    We help prepare documentation for both the Let to Buy mortgage and your new residential mortgage.

    Step 4 – Submission and Underwriting

    We submit your applications and manage the process through underwriting, keeping you informed throughout.

    Step 5 – Completion

    Once approved, we support you through completion so both mortgages are set up smoothly and correctly.

    • Make sure you can manage two mortgages comfortably

    • Understand your responsibilities and obligations as a landlord

    • Consider the impact of tax and ongoing property costs

    • Check how much equity you have available in your current home

    • Plan for periods where the property may not be rented out

  • A Let to Buy mortgage can be a flexible way to move home without selling your existing property — but it’s important to understand whether it’s right for you.

    At J Finance, we provide clear, personalised advice to help you explore your options and make confident decisions.

    📞 01635 521300
    📧 contact@jfinance.co.uk

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