Helping you move home with a let-to-buy mortgage In the current housing market, with the shortage of potential buyers, moving home is proving to be increasingly difficult. To enable you to move to a new home, a let-to-buy mortgage could be the answer you are looking for, says Brian Murphy, Head of Lending at National broker Mortgage Advice Bureau. Let-to-buy mortgages enable you to move home and buy a different property, whilst keeping your existing property and renting it out. A let-to-buy mortgage can be an alternative to a buy-to-let mortgage.

How does a let-to-buy mortgage work?

Eligibility is subject to the proposed rental income on your current property being sufficient to cover the cost of your existing mortgage. A deposit may be required for the purchase of your new property and many people raise this by releasing equity from their existing property by way of a re-mortgage, subject to there being sufficient levels of equity available.

How do lenders work out let-to-buy rent?

You will need to satisfy your lender that you meet their let-to-buy mortgage calculations. Lenders have different methods of assessing this but in general it is a formula that requires that the level of rental income is sufficient to meet the level of mortgage repayment, with an additional degree of margin thereby providing the lender with a greater level of comfort and reassurance. What are the advantages of a let-to-buy mortgage? Retaining your property as an investment enables you to benefit from the mortgage being repaid either in full or in part by the tenants. If you are having trouble selling your property it can be of real benefit, or it could be a springboard to starting your property portfolio. The rules of let-to-buy lending are different and can be more flexible and require less equity.

What are the disadvantages of a let-to-buy mortgage?

You must ask your existing lender for permission to switch to a let-to-buy and you must also inform your buildings and contents insurance providers.

How should I go about getting a let-to-buy mortgage?

For more information about let-to-buy mortgages, contact an Independent Mortgage Adviser at Mortgage Advice Bureau for further information.

Your home may be repossessed if you do not keep up repayments on your mortgage.

A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances. A typical fee is £95.