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Can I Change My Mortgage to Buy to Let?

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Depending on your circumstances and the mortgage lender you are with, yes, you can change your mortgage to a buy to let. The act of changing your current mortgage to a buy to let and then getting a new mortgage to buy a property is called a let to buy transaction.

After owning your home for some time, you may decide that you want a change. Perhaps you are moving in with a friend or partner, who owns their own property? Maybe you would like to buy a new home to live in? In some rare cases, you may wish to move into rental accommodation.

In any case, you may wish to keep your current home, converting it from a residential property, into a buy to let property, becoming a landlord. This often proves to be a fruitful endeavour for many, as it provides a boost to your income and a long-term investment.

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How to change your mortgage to buy to let?

If you are wanting to change your mortgage to a buy to let, you are first going to check if you are tied into a fixed rate deal with redemption fees.

If you are, the best thing to do would be to speak with your current lender to make sure this is something they will accept and to find out your options. If you are not tied into a deal, your next step is to get in touch with a trusted mortgage broker who can search the market for you.

This is because you will be remortgaging your property, to change your mortgage type. Whether you are staying with your current lender or switching to a new one, an expert mortgage advisor will be able to help you find a favourable deal to move onto.

The reason why you will be remortgaging, is because the terms of your deal are changing. It’s not just as simple as asking the lender if you can do it, you’ll need to pass their strict criteria to be accepted for a buy to let mortgage.

When changing to a buy to let mortgage, knowing how much rental income you expect to receive will speed up the process, you can usually use online property rental sites to find local comparable properties.

What criteria do I need to meet to change my mortgage to buy to let?

First, the main thing to note is that you will generally have to stay on your residential mortgage for at least six months if you change it. Once you have done that, there are a variety of other factors that will be considered.

Affordability

Your affordability will be entirely dependent on the rental potential of your property. Most lenders will want to stress-test your property to see if you are able to make up at least 125% of your monthly mortgage payment amount.

Equity in Your Home

Whilst you won’t need a deposit per se, you will need to have a substantial amount of equity in your home to remortgage onto a buy to let deal.

Lenders will want you to have at least 20-25% equity in your property, with this number potentially being higher if you have bad credit. You’ll likely need further equity in your property to be able to put down the deposit for a new home.

Credit History

Having a poor credit history can harm your chances of being able to obtain a mortgage, though it’s not always impossible. There are bad credit mortgages available for someone doing a buy to let, though you may be limited if any new credit issues have arisen since your initial mortgage was taken out.

The important thing here, is working on building your credit score back up and the time that has passed since those problems were present. For example, if you have had a CCJ, the further away you are from that being issued, the better your chances of obtaining a mortgage.

Buy to Let Mortgage Advice

Learn more about our service and how we can help you find a buy to let mortgage product for you and your property.

Type of Property

If you are looking to turn your home into a HMO property or a holiday let, you may find that the lenders and deals available to you are limited. This is a very specialist circumstance and will require you to speak with a specialist mortgage broker before you can proceed.

Landlord Experience

There are some mortgage lenders out there who won’t offer deals to first time landlords. If you have been a landlord before, you will have access to more deals with a larger selection of mortgage lenders.

We have a vast panel of mortgage lenders that we work with, some of whom will offer a buy to let mortgage to a first-time landlord. We would recommend speaking to one of our mortgage advisors to learn more.

Can I live in my buy to let property?

No, you cannot live in your buy to let property. This would absolutely be a breach of your mortgage agreement and could result in serious consequences for you and your home.

Letting Out Your Current Home to Buy a New Property

If you are looking to let out your current property as a means of purchasing a new home to live in, this is called a let to buy. This is a popular choice for people who want to boost their income and move somewhere else.

This will work the same as a standard buy to let, except for you instead applying for two mortgages, instead of one. As such, your lender will want to see that you can afford both.

How many buy to let mortgages can I have?

Whether you are making plans to expand your portfolio in the future or are an existing landlord looking to change your residential property into a buy to let, you may be wondering how many buy to let mortgages you can have.

Whilst there is no specific strict limit to the amount of mortgages that you can have, your ability to take out additional mortgages will depend on the risk to the lender. If you would like to learn more about this topic, please speak to a dedicated mortgage advisor.

If you are fixed into a current deal, consent to let might be a good solution to avoid early redemption charges. Some homeowners may have access to something called consent to let. This is typically used as a short-term option, with your property only temporarily being classed as a buy to let.

Whether your lender will grant you consent to let will be down to individual circumstances, therefore, it’s always best to contact them to discuss your options.

If you receive permission to let your property on a consent for let, this will be for a set time period only and you will need to remortgage to a buy to let product down the line.

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Speak to a Qualified Buy to Let Expert

To learn more about the options you have available for converting your residential property into a buy to let, book your free mortgage appointment today.

A trusted member of our team will be able to go over your case and let you know what deals you have access to, as well as providing any further buy to let mortgage advice you need.


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About the Author

Malcolm Davidson

Managing Director of UK Moneyman LTD

Malcolm is one of the UK’s most well-known and respected Mortgage Advisors. He is passionate about providing a 5* customer experience and he has also trained and mentored dozens of fellow Advisors in a career that is now in its third decade.

In addition to his day to day duties as Managing Director, Malcolm still gives out mortgage advice and feels lucky that his job is also very much his hobby.

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