Remortgaging your home to buy another property
Can I let out my property and buy another one?
It is possible to let out your home and release cash to purchase another property. This is commonly known in the industry as a “let-to-buy” mortgage.
A selection of banks and building societies allow borrowers to remortgage their home, turn it into a buy-to-let while raising funds to purchase a new property.
Trinity Financial has arranged hundreds of let-to-buy mortgages enabling clients to have an investment property while releasing funds to buy a new home.
How do the lenders work out how much I can borrow?
Let-to-buy mortgages are taken in two parts, the refinance of the residential mortgage to a buy-to-let and the onward purchase.
Buy-to-let lenders work out how much they can raise for a mortgage using the rental income to generate the maximum loan size. Some will also take personal income to provide larger loan sizes.
For the residential part of the mortgage, applicants with need a 10 per cent deposit. A typical income multiple is five times both single and joint salaries, rising to 5.5 or even six times salary for those earning over £100,000.
Many of the mortgage lenders are offering incredibly cheap residential and buy-to-let mortgage rates. The vast majority of borrowers are taking fixed rates, although there are some great tracker mortgages.
The cheapest two-year fix is priced at just over 1% for those with a 40% deposit, rising to 1.25% with a 25% deposit and 1.5% with a 15% deposit.
Buy-to-let mortgage rates are also fantastically cheap at the moment, and they are not much more expensive than some of the residential rates.
The lowest two-year fix is priced around 1.35% with a 40% deposit, rising to 1.60% with a 25% deposit. Some of the lenders will offer more generous rental calculations and larger loans if borrowers take a five-year fix.
Many of the lenders provide let-to-buy mortgages although some will only provide part of the mortgage because they do no offer buy-to-let deals.
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Barclays for Intermediaries |
Yes – Allows remortgage of main home to buy-to-let and mortgage for the onward purchase. |
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Clydesdale Bank |
Yes – Offers generous buy-to-let stress test providing larger buy-to-let mortgages. |
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Halifax |
Halifax does not allow buy-to-let mortgages, although it will allow the onward purchase. |
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Nationwide Building Society |
Nationwide does not accept buy-to-let mortgages, although it will allow onward purchases. |
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NatWest |
Yes – Both remortgage of home and onward purchase. |
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Platform |
Yes – Remortgage of the residential property onto a buy-to-let providing it has evidence of mortgage offer for onward purchase. |
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Santander |
Yes – Let-to-buy accepted but has tight stress test making it hard to secure a large enough buy-to-let mortgage. |
It is possible to secure a mortgage to turn your home into a buy-to-let without buying a new property at the same time.
Trinity Financial can help to remortgage your residential property onto a buy-to-let to release funds.
This might be useful if you are moving into rented accommodation or in with a parent or partner.
It is possible to remortgage your property to release funds if you are planning to purchase a property overseas.
Some of the building societies are happy for the enquiry to be released to purpose property.
Trinity Financial can also arrange mortgages to buy overseas. We recently arranged a mortgage for a client buying in Spain: https://www.trinityfinancialgroup.co.uk/article/500000-euro-spanish-mortgage-for-client-buying-second-home-in-spain
Trinity Financial will submit an application(s) the most appropriate lender with the most competitively priced rates. Our brokers provide you with a Key Facts Document confirming the monthly repayments.
Call us on 020 7016 0790 or book a consultation https://www.trinityfinancialgroup.co.uk/book-a-consultation/.
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