Whether or not you can switch your current mortgage to a buy-to-let depends on your individual situation and your mortgage provider’s policies. This process of converting your existing residential mortgage and taking out a new one to purchase another home is commonly known as a “let-to-buy” arrangement.
Over time, your living situation may change. You might be planning to move in with a partner or friend who already owns a property. Alternatively, you may be looking to purchase a new home for yourself. In some instances, people even choose to rent rather than buy again.
Whatever the reason, you may decide to keep your current property and let it out instead of selling. By doing so, you’re turning it into a buy-to-let investment and stepping into the role of a landlord. Many find this path rewarding, as it can offer a valuable source of additional income and serve as a long-term financial asset.
How to change your mortgage to buy to let?
If you’re thinking about switching your mortgage to a buy-to-let, your first step should be to check whether you’re currently on a fixed-rate deal that comes with early repayment charges.
If you are tied into a deal, it’s important to speak with your existing lender to see if they’re open to the change and to learn more about what your options are. If you’re not locked into any agreement, your next move should be to speak with a reputable mortgage broker who can search the market on your behalf.
This process involves remortgaging your home to change the type of mortgage you have. Whether you stick with your current lender or move to a new one, a knowledgeable mortgage adviser can help you find a competitive new deal.
The reason for remortgaging is that you’re changing the terms of your loan. It’s not as straightforward as simply asking to switch—it involves meeting the lender’s criteria for a buy-to-let mortgage, which can be more rigorous.
One thing that can help speed up the application is having a clear idea of the rental income you expect to earn. You can usually get an estimate by checking online property sites to see how much similar homes in your area are being let for.
What criteria do I need to meet to change my mortgage to buy to let?
To begin with, it’s important to understand that if you plan on switching to a buy-to-let mortgage, you’ll usually need to have been on your current residential mortgage for at least six months before making any changes. After that, several other factors come into play.
One key element is how much rental income your property could generate. Lenders typically carry out a stress test to check if the expected rent covers at least 125% of your monthly mortgage payments.
While you won’t need to provide a new deposit in the usual sense, you will need to have a decent amount of equity in your current home in order to remortgage it as a buy-to-let.
Most lenders will expect you to have between 20% to 25% equity, though this figure could be higher if your credit history isn’t ideal. If you’re also hoping to buy another property to live in, you’ll likely need even more equity to use as a deposit.
Having a poor credit score doesn’t necessarily rule you out, but it can make the process more difficult. Some lenders do offer buy-to-let mortgages for those with bad credit, though your options may be limited—especially if you’ve had more recent credit issues.
To improve your chances, it’s wise to work on rebuilding your credit rating. The more time that has passed since a credit problem occurred, the better. For instance, if you had a County Court Judgment (CCJ), your likelihood of approval increases the longer ago it was issued.
If you’re planning to convert your home into a House in Multiple Occupation (HMO) or use it as a short-term holiday let, you’ll find that fewer lenders are willing to offer suitable deals. These are more niche arrangements and usually require guidance from a specialist mortgage adviser.
Some lenders also won’t consider applications from individuals who are becoming landlords for the first time. Having previous experience as a landlord often gives you access to a wider choice of lenders and more favourable deals.
That said, there are still options for first-time landlords. A number of mortgage providers we work with do offer buy-to-let products for those just starting out in property letting. Speaking with a qualified mortgage adviser can help you explore these routes and find the right solution for your situation.
Can I live in my buy to let property?
Of course! Below is a paraphrased version of the original blog content, written in British English and in a natural, easy-to-read tone:
No, you are not allowed to live in a property that’s on a buy-to-let mortgage. Doing so would breach the terms of your loan agreement, and this could lead to serious consequences, including possible repossession.
Renting Out Your Current Home to Buy Another
If your plan is to rent out your existing home in order to buy a new one to live in, this is known as a “let to buy”. It’s a common route for those wanting to move house while earning rental income from their old property.
The process is similar to a regular buy-to-let mortgage, but instead of just one mortgage, you’ll be applying for two—one for your current home (as a buy-to-let) and another for the property you’ll be moving into. Because of this, lenders will want to be sure you can comfortably afford both repayments.
Is There a Limit to the Number of Buy-to-Let Mortgages I Can Have?
Whether you’re thinking about growing your property portfolio or turning your residential home into a rental, you might be wondering how many buy-to-let mortgages you can hold at once.
There’s no strict cap on the number of buy-to-let mortgages you can take out. However, your ability to get more will depend on factors like your income, current financial commitments, and how risky the lender considers the arrangement to be. If you want to explore this in more detail, speaking with a mortgage adviser is a good idea.
Can I Use Consent to Let Instead?
If you’re still locked into your current mortgage deal, switching to a buy-to-let might trigger early repayment charges. In this case, some lenders offer an option called “consent to let”, which allows you to rent out your home temporarily without having to remortgage right away.
This type of permission is usually granted for a limited period and is considered a short-term solution. Whether or not you’ll be approved depends on your personal circumstances and your lender’s policies, so it’s best to speak to them directly.
Keep in mind that once the agreed period ends, you’ll likely need to formally switch your mortgage to a buy-to-let product if you plan to continue letting the property.
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