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Let-to-buy mortgages allow you to buy a new home while letting out your current home.
Rather than a single mortgage, let-to-buy involves you taking two mortgages with the same lender; a buy-to-let mortgage on your existing home and a standard mortgage on your new home.
You will be pleased to hear that although the market for let-to-buy mortgages is relatively niche, there are specialist providers who are willing to lend on this basis.
As a whole-of-market mortgage broker, at Teito, we have access to deals not available to the general public, including those who lend for let-to-buy mortgages.
Let-to-buy mortgages can provide a straightforward way to convert your home to a buy-to-let property and move to a new home at the same time.
There are many reasons why you may not be keen to sell your existing home, a few of the more common ones include:
You will need to apply for two mortgages with the same lender; a buy-to-let mortgage for your current property and a standard mortgage for your new property.
A few points to consider:
Depending on your current lender, they may grant consent to let on your existing residential mortgage, which may permit you to move our and rent your home for a short length of time while you secure a second residential mortgage for your new home. However, you may find that you struggle to meet the eligibility criteria for having two residential mortgages under this arrangement.
As you are applying for two mortgages, you'll have to meet the criteria for both.
To qualify, you will need to:
As with let-to-buy mortgages you will own two properties, you will pay additional stamp duty land tax than if you were simply moving home.
Stamp duty in England and Northern Ireland (from October 2021) | |||
---|---|---|---|
PURCHASE PRICE | FIRST TIME BUYERS | RATE ON MAIN RESIDENCE | RATE FOR ADDITIONAL PROPERTIES |
Up to £300,000 | 0% | ||
from £300,001 to £500,000 |
5% | ||
Up to £125,000 | Zero | 3% | |
The next £125,000 (the portion from £125,001 to £250,000) | 2% | 5% | |
The next £675,000 (the portion from £250,001 to £925,000) | 5% | 8% | |
The next £575,000 (the portion from £925,001 to £1.5 million) | 10% | 11% | |
The remaining amount (the portion above £1.5 million) | 12% | 15% |
You can claim back the additional stamp duty if you sell your second property within three years and make the claim within twelve months of completion.
As let-to-buy mortgage arrangements can be complex, we would recommend that you use an experienced mortgage broker.
At Teito, we are an independent whole-of-market broker, meaning we have access to deals that are not generally available to the public. Complete our simple online form today to get started and we'll make your let-to-buy mortgage as straightforward as possible.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.