Let-to-Buy Mortgages

Let-to-Buy Mortgages

– How it Works

A let-to-buy arrangement involves two mortgages running side by side:

• • Your current home is remortgaged onto a buy-to-let mortgage, allowing you to rent it out to tenants.
  • Your new home is purchased with a residential mortgage, which becomes your main residence.

This setup can be especially beneficial if your existing property has built up equity, as you may be able to release some of it to use as a deposit for your new home.

– Who it’s For

Let-to-buy is ideal for those who:

• • Want to move to a new home without selling your current property.
  • Plan to aim to generate rental income that may help with mortgage costs.
  • Are interested in starting or expanding a property portfolio.

– Key Considerations

Lenders will look closely at both your personal income and the rental potential of your current property. You may also need:

• • A larger deposit (typically 25–40%) for your new residential property.
  • To to assess whether the expected ental income meets lender affordability requirements for buy to let mortgages.
  • To budget for periods when the property might be empty (void periods).

– Tax and Legal Points

There are tax implications to consider, including:

• • Stamp Duty: Let-to-buy often counts as purchasing an additional property, which may mean paying higher stamp duty rates.
  • Capital Gains Tax: If you later sell your former home, you may be liable for CGT on any increase in value since it became a rental.

It’s wise to seek professional tax advice to ensure you understand all financial implications before proceeding.

– How I Can Help

Navigating two mortgages at once can feel complex, but I’m here to help you understand the process. I’ll assess your options, explain each step clearly, and explore mortgage options that align with both your immediate move and your longer term aims.