Let to Buy Mortgages Made Simple
Want to move house but keep your current property as an investment? Let to Buy mortgages could be your perfect solution. At Dwello, we help homeowners unlock the potential in their existing property while stepping up to their dream home – all in one coordinated process.
Rather than the traditional sell-then-buy approach, Let to Buy allows you to convert your current home into a rental property while simultaneously purchasing your new residence. It's like achieving two goals with one smart strategy.
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Why Choose Let to Buy?
Let's say you're working away from home and your property sits empty, or you want to move in with a partner but don't want to lose your property investment. Let to Buy could be the ideal solution, allowing you to keep your asset while moving forward with your life.
Keep your property ladder position.
Rather than selling and potentially losing out on future property growth, you're building a portfolio while moving up the ladder.
Generate passive income.
Your former home becomes a rental property, providing ongoing income that could help with your new mortgage payments or build long-term wealth.
Avoid the sell-buy chain stress.
No more worrying about timing completions or finding temporary accommodation. You control both sides of the equation.
Access your property's equity.
Release cash from your current home's value without selling, using it as a deposit for your next purchase.
Eligibility Criteria
Since Let to Buy involves two separate mortgage applications, you'll need to meet criteria for both:
Essentials
For the Let to Buy conversion:
20-25% equity in your current property (same as standard buy-to-let requirements)
The property must achieve 125% rental coverage (rental income 125% of the mortgage payment)
Clean credit history and stable income
Essentials
For your new residential mortgage:
Standard residential mortgage affordability based on your income
Deposit for the new property (often funded by equity release from the Let to Buy)
Employment stability and creditworthiness
The process involves clearing the buy-to-let side first, then assessing your residential borrowing capacity separately.
The Mortgage Process Explained
Here's the thing about mortgage applications: they're really not as complicated as everyone makes them out to be.
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Property valuation and rental assessment.
We'll arrange a valuation of your current property and assess realistic rental income to ensure it meets lender criteria.
02
Let to Buy mortgage application.
Convert your existing residential mortgage to a buy-to-let product, potentially releasing equity in the process.
03
Residential mortgage application.
Using your income and the equity released, secure financing for your new home.
04
Coordination and completion.
We'll coordinate both transactions to ensure smooth completion of your property conversion and new purchase.
The beauty of this approach is that we can often structure both mortgages with the same completion date, minimising disruption and ensuring everything happens seamlessly.
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Tax and Legal Considerations
Converting your main residence to a rental property has several implications:
Capital Gains Tax:
You'll lose your main residence relief on future gains from the date you stop living there. However, you might qualify for Private Residence Relief for part of the ownership period.
Income Tax:
Rental income becomes taxable, though you can offset mortgage interest and other allowable expenses against rental profits.
Stamp Duty:
You may face additional Stamp Duty Land Tax on your new purchase if the total value of properties you own exceeds certain thresholds.
Common Questions for First Time Buyers
All your questions answered...
What if my credit score isn't perfect?
How much deposit do I actually need?
How long does it all take?
What paperwork will I need?
The information contained in this article does not constitute financial or mortgage advice from Dwello Mortgages. It is provided for general informational and educational purposes only. No information contained constitutes a solicitation, recommendation, endorsement or offer by Dwello.
Dwello is not making any representations or warranties, and assumes no liability, for the content provided in this article, including any third party information. Consumers should always consult their own financial advisors before making any mortgage or remortgage decisions based on this type of general market commentary and analysis.
All mortgage pricing, rate scenarios and cost comparisons used are hypothetical examples. Actual rates, fees and mortgage costs may vary based on the specific lender and the individual borrower's personal financial circumstances.
Dwello Mortgages, a trading style of Dwello Mortgages Limited is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Dwello Mortgages Limited is registered in England and Wales with company number 14432864. Registered Office: St James House, Hollinswood Road, Telford TF2 9TW
Dwello is not making any representations or warranties, and assumes no liability, for the content provided in this article, including any third party information. Consumers should always consult their own financial advisors before making any mortgage or remortgage decisions based on this type of general market commentary and analysis.
All mortgage pricing, rate scenarios and cost comparisons used are hypothetical examples. Actual rates, fees and mortgage costs may vary based on the specific lender and the individual borrower's personal financial circumstances.
Dwello Mortgages, a trading style of Dwello Mortgages Limited is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Dwello Mortgages Limited is registered in England and Wales with company number 14432864. Registered Office: St James House, Hollinswood Road, Telford TF2 9TW
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Dwello Mortgages Limited, St James House, Hollinswood Rd, Telford TF2 9TW
