Let-to-buy mortgage for couple keeping previous home for long term investment
Key features:
- £150,000 raised from previous property and switched to buy-to-let
- £645,000 mortgage agreed to fund new home
- Residential and buy-to-let rates below 2%
Our clients
Our clients asked for help to arrange a mortgage to purchase a new home. They were keen to keep the existing property if they could as it was in a good area and would generate around £1,750 a month rent. The couple were both professionals working in financial services and living in London, they were also earning over £100,000. They had found a new property in Surrey to purchase with more outside space.
How did we help?
After establishing they had sufficient equity in their property to raise a deposit and enough income to raise £645,000 to fund the £800,000 property purchase, Trinity's broker approached two lenders offering competitively priced let-to-buy mortgages.
The first thing he did was to turn their existing home into a buy-to-let and raise around £150,000 deposit to put towards the onward purchase as part of a remortgage to another lender. This was possible because the home was worth £750,000 and there was lots of equity. The second job was to organise the mortgage for the onward purchase, and he secured a competitively priced five-year fix.
Why was it difficult?
Some of the lenders do not allow borrowers to do let-to-buy transactions, so you have to approach an appropriate bank or building society. Many of the buy-to-let providers have also tightened their stress tests making it harder to release enough cash to be used as the deposit.
What was the buy-to-rate?
A 1.79% rate fixed until 01/01/2023, and after the fixed period it reverted to the banks 4.54% standard variable rate. The overall cost for comparison is 4.3% APRC. The arrangement fee was £1,995, and early repayment charges applied. The mortgage had a 25-year term, and there was a free basic property valuation.
What was the residential rate?
A 1.98% rate fixed until 31/10/2025, and after the fixed period it reverted to the banks 3.59% standard variable rate. The overall cost for comparison is 3.1% APRC. The arrangement fee was £999, and early repayment charges applied. The mortgage had a 30-year term, and there was a free basic property valuation.
Call Trinity Financial on 020 7016 0790 to secure a let-to-buy mortgage or book a consultation
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