Let to Buy Mortgage Calculator & Guide
Found yourself in a tricky ‘let to buy’ situation and wondering what the options are? You can use our let to buy mortgage calculator to find out how much you can borrow on both properties! If you have any other questions just get in touch with our advisors who will be happy to help! We are experts in let to buy!
A Helpful Let To Buy Mortgage Calculator
Considering renting out your existing home, freeing up some money and then moving to a new family residence? Great, this calculator will help you understand whether a let to buy could be a viable option for you.
Let to buy can be a very complicated process, and we recommend that you use the calculator as reference only, before talking to our expert mortgage advice team.
Find out more about this mortgage option in our comprehensive guide below. Remember, you can speak with one of our mortgage advisers at any time if you want to discuss something in more detail.
Let to Buy Mortgage Guide
After using the calculator, if you’re still unsure about whether let to buy is a viable option for you, take a read through this useful guide which explains everything you need to know about this mortgage type
What is a Let to Buy Mortgage?
For many buyers looking for a new home, the frustrating and slow part of the process can be selling their existing home. With a let to buy mortgage, you can buy your new home as well as keep your existing home to rent out to tenants. With rental property in high demand in many parts of the UK, the buy to let market has been growing significantly in recent years.
With let to buy mortgages, you are basically remortgaging your existing home to a buy to let mortgage and withdrawing the equity to use as a deposit on a new residential property that you intend to move to.
Why Let to Buy?
There are several reasons why you might take out this mortgage type as follows:
- You may want to move home but believe your existing property is still a sound investment in the long term so would rather keep it than sell it.
- If you have found a new home you want to buy but can’t wait to sell your existing property, let to buy is an option to speed up the process.
- If you are struggling to raise enough money for a deposit for your new property, you can take this mortgage type to free up equity held in your current property, and use it as a deposit on your new property.
- It is a good solution for couples who want to move in together and already own a property each. It allows them to move into one property and rent out the other property(ies).
Let to Buy or Buy to Let: What’s the difference?
Both these mortgage types are options if you are looking to rent out a property. A let to buy mortgage is applicable if you want to rent out a property you already own and currently live in.
A buy to let mortgage is applicable if you want to specifically buy a property to let out. The reality is that they are extremely similar but lenders will often review the situations differently, have different lending criteria and possibly different deals.
If you want further information about buy to let mortgages then you can read our comprehensive guide to buy to let.
Important things to consider with Let to Buy
- There are many responsibilities attached to being a landlord. Do your research and ensure you have carefully considered what will be involved.
- Ensure you can afford the additional debt. Most importantly, you will need to be able to afford your monthly mortgage payments should your rental property be empty for several months of the year or if interest rates increase.
- You cannot live in a property with a buy to let mortgage and vice versa, you cannot rent out a property that has a residential mortgage on it without the lender’s consent
- Lending criteria can be strict.
Is Let to Buy a viable option for me?
You can use our calculator to work out whether the numbers could add up in your favour. As mentioned, the criteria for this type of mortgage can be tricky so you will need to talk to one of our advisers in order to fully understand your options.
What are the advantages and disadvantages of Let to Buy?
Advantages
- It helps resolve potential mortgage issues associated with converting your home to a buy to let by allowing you to buy a new home to live in simultaneously.
- It takes the pressure off to sell quickly which can help you avoid making an unnecessary loss.
- Owning a second property can be financially rewarding in the future if property prices rise.
Disadvantages
- Let to buy can be more costly than other mortgage types because fewer lenders offer them.
- If you don’t let out your existing property quickly, you could be stretched
- Stamp duty can be costly when buying a second property.
- Owning two properties could lead to steeper losses if house values fall.
Alternatives to Let to Buy
There are a few alternatives that should be considered before you make your final decision.
Renting
Instead of purchasing another property, you could consider selling your existing property and moving into rented accommodation for a while. You will then be a chain-free buyer which could help you get a better deal on the next property. You won’t be growing your property portfolio however.
Buy-To-Let Mortgage
Buy to let is an alternative if you’re willing to move out of your existing property to then secure a buy to let mortgage on that property instead of your existing residential mortgage. This can be costly and complex however.
Consent to Let
This is where a lender grants you consent to let out your residential mortgage, allowing you to move and let out your home for a relatively short length of time. It might be hard to get a second residential mortgage however, while you have consent to let.
Final considerations
The let to buy mortgage process is very complex but can be a rewarding solution if you are looking to hold onto your property assets. Remember that being a landlord and juggling multiple properties can be time consuming and stressful.
There are also many tax implications to consider when you have a rental property. Contact us to discuss your situation and we will be happy to help.
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Hello! I’m Matthew and I’m an expert in making, saving, and borrowing money!
Home loan mortgages, development finance, commercial lending, etc (oh the joy) were not exactly the things I dreamed of dealing with as I was growing up. But with 10+ years of financial wizardry under the belt, it has become something of a passion and outlet for providing help to those that need it.
“Knowledge is power is time is money”
The vast majority of cases are handled free of charge! However, there are some more complex situations where a fee will need to be applied.
We will ALWAYS let you know this UPFRONT and with no commitment on your part. Transparency is integral to our service.
