Let to buy mortgage for couple buying new home

by Aaron Strutt

Jul 20 2014

We were approached by a city executive working in London who wanted to purchase a new property to live in. She did not have a big enough deposit and she wasn’t keen to sell her existing property.

Case details and solution

Trinity explained that let to buy mortgages are very popular at the moment. They allow homeowners to release the equity built up in their property over the years and use it as a deposit to buy their new home. The old home is turned in to a buy-to-let enabling owners’ to take advantage of increasing house prices on their two properties. 

Existing property turned into buy-to-let

Property: House valued at £250,000 in St Albans. 

Mortgage loan amount and rate: Mortgage increased to £195,000 to generate a deposit for the new property purchase. The rate was a two-year tracker at 3.49% - 2.99% over the Bank of England base rate. The lender’s standard variable rate is currently 4.74%.

Arrangement fee: £995 and added to the loan amount. APR: The overall cost for comparison is 4.5%. Term: 25 years. Repayment type: Interest-only. Loan-to-value: Approximately 70% of the property value. Early repayment charge: 3% for five-years. 

Mortgage for new home

Property: House valued at £620,000 in St Albans. Mortgage loan amount and rate: £495,000 mortgage arranged to purchase new home. Five year fixed rate at 3.55% and reverts to lender’s standard variable rate at 4.74%. 

Arrangement fee: £995 and added to the loan amount. APR: The overall cost for comparison is 3.9%. Term: 25 years. Repayment type: Mortgage taken on a capital repayment basis. Loan-to-value: Approximately 80% of the property value. Early repayment charge: 5% for five-years.

The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration. 

If you would like help to secure a let to buy mortgage or to find out if you would qualify for one, call Trinity Financial on 020 7016 0790. You can also email: enquiries@trinityfinancialgroup.co.uk