Buying a New Home While Letting Your Current One Out? A Guide to Let-to-Buy Mortgages

If you’re looking to move into a new home while keeping your current property as a rental, a Let-to-Buy Mortgage could be the perfect solution. This type of mortgage allows homeowners to let out their existing property and use the rental income to support a new home purchase.

What Is a Let-to-Buy Mortgage?

A Let-to-Buy Mortgage is designed for homeowners who wish to buy a new property while renting out their existing one. Instead of selling your current home, you remortgage it onto a buy-to-let basis, using the equity or rental income to support a new residential mortgage.

How Do Let-to-Buy Mortgages Work?

1. Remortgage Your Current Property – Your existing mortgage is switched to a buy-to-let mortgage.

2. Release Equity – If you have equity in your home, you may be able to release some of it to put towards the deposit for your new property.

3. Secure a New Residential Mortgage – Once your current property is let out, you can apply for a mortgage on your new home.

For an estimate on affordability, use our Mortgage Affordability Calculator.

Pros and Cons of Let-to-Buy Mortgages

Pros:

• Avoid the Chain – You don’t need to sell your current home before moving.

• Rental Income – Helps cover mortgage payments on your existing property.

• Potential Capital Growth – Benefit from property value appreciation over time.

Cons:

• Higher Interest Rates – Buy-to-let mortgages typically have higher rates than residential ones.

• Additional Costs – Landlord insurance, maintenance, and potential void periods.

• Affordability Checks – Lenders will assess your income, rental potential, and overall financial situation.

Who Can Get a Let-to-Buy Mortgage?

To qualify for a Let-to-Buy Mortgage, lenders typically require:

• A minimum amount of equity in your current home.

• A rental valuation confirming your property’s income potential.

• Proof of affordability for the new residential mortgage.

Check your eligibility with a Mortgage in Principle before applying.

Key Considerations Before Choosing Let-to-Buy

• Tax Implications – Letting out a property may impact your tax liability.

• Landlord Responsibilities – You’ll need to comply with rental regulations and property management duties.

• Mortgage Lender Restrictions – Some lenders have specific requirements for let-to-buy applications.

If you're unsure whether a Let-to-Buy mortgage is right for you, our team at Possible Mortgages can guide you through the process.

Final Thoughts

Let-to-Buy Mortgages offer a practical solution for those looking to buy a new home while keeping their current property as an investment. If you’re considering this option, make sure to assess affordability, tax implications, and lender requirements. Need expert guidance? Contact us today for tailored mortgage solutions.

Your home may be repossessed if you do not keep up repayments on your mortgage. Your property may be repossessed if you do not keep up repayments on your mortgage. Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority. You may have to pay an early repayment charge to your existing lender if you remortgage.