Moving Home Without Selling, How Do Let to Buy Mortgages Work?
Updated: 6 days ago
Moving home doesn't always mean you have to sell your current property. If you're thinking about buying a new home but would like to keep your existing one and rent it out, a let-to-buy mortgage could be an option worth exploring.
A let-to-buy mortgage allows you to remortgage your current home onto a buy-to-let mortgage, while arranging a separate residential mortgage for your next property. In this guide, we'll explain how let-to-buy works, what lenders look at and the costs you'll need to consider before deciding whether it's right for you.
How Does a Let-to-Buy Mortgage Work?
A let-to-buy mortgage is designed for homeowners who want to move to a new property without selling their existing home. It involves arranging two mortgages:
A buy-to-let mortgage on your current property: Your existing residential mortgage is usually replaced with a buy-to-let mortgage, allowing you to rent the property to tenants.
A residential mortgage on your new home: You arrange a separate mortgage to purchase the property you intend to live in.
The rental income from your existing property will usually need to meet the lender's rental income requirements. You'll also need to meet the affordability and eligibility criteria for your new residential mortgage.
Not every lender offers let-to-buy, and the amount you can borrow will depend on your circumstances, the property's value, expected rental income and the lender's criteria.
Can I Port My Existing Mortgage When Using Let-to-Buy?
If you're currently tied into a fixed-rate mortgage, check whether early repayment charges would apply if you switch to a buy-to-let mortgage. These charges can add considerably to the cost of moving.
Although some residential mortgages are portable, this generally means transferring your existing mortgage product to a new property when you move. If you want to keep your current home and rent it out, you'll usually need to explore a let-to-buy remortgage instead.
Your existing lender may offer a suitable option, but not all lenders support let-to-buy arrangements. It's worth comparing the costs and terms before making a decision.
What happens to my existing mortgage?
If you're thinking about moving home but want to keep your current property, a Let to Buy mortgage could be the solution. This type of mortgage allows you to remortgage your existing home and let it out, while freeing up funds to purchase your next property.
While often confused with Buy to Let, Let to Buy is specifically designed for those moving home and renting out their current property. Keep in mind that not all lenders offer Let to Buy mortgages, and you may face early repayment charges with your existing lender. Make sure to explore your options to find the best fit for your needs!
Moving Home, Can I borrow more with a Let To Buy Mortgage?
When arranging a let-to-buy remortgage, the amount you can borrow against your existing property will usually depend on its current value, the outstanding mortgage balance and the expected rental income.
Lenders assess whether the proposed rent is sufficient to support the buy-to-let mortgage, using their own rental income calculations. This may limit how much equity you can release from the property.
If you need funds for the deposit on your next home, it's important to establish how much equity could realistically be released and whether this will be enough to support your purchase.
If you're thinking about raising additional funds through a LTB remortgage it is worth remembering that selling your current home will give you greater buying power for your next property, as you're likely to have more money available for your deposit.
Will keeping my current property restrict what I can borrow for my next home?
Keeping your existing property could affect how much you can borrow for your next home, but it doesn't necessarily mean your borrowing capacity will be reduced.
Lenders assess let-to-buy applications in different ways. Some may use the expected rental income to cover the buy-to-let mortgage commitment, while others will take a more detailed view of your overall finances.
Your income, existing commitments, deposit, credit history and the rental income from your current property can all influence the amount you may be able to borrow. This is why it's important to assess both mortgages together before committing to a move.
Let-to-Buy Mortgage Costs and Things to Consider:
Interest rates and fees are typically higher than those offered for a residential mortgage
They are more complex so seeking mortgage advice is recommended, including advice from a specialist tax adviser or accountant too
Although not always limited to, the majority of lenders restrict the loan to 75% of the property’s value, known as Loan to Value (LTV)
Although 75% LTV is typically what most lenders can offer, this will be very much dependent on the amount of rental income paid each month
Stamp Duty When Keeping Your Existing Property
If you buy a new home while retaining ownership of your current property, you may have to pay the higher rate of Stamp Duty Land Tax (SDLT) for additional residential properties.
This can add a significant amount to your moving costs, so it's important to factor it into your budget before proceeding. The rules depend on your circumstances, including whether you are replacing your main residence and when your existing property is sold.
Make sure you check the current SDLT rules or speak to your solicitor before committing to the purchase.
If you are looking to move without selling your home you will also need to consider Stamp Duty Land Tax (SDLT), where you will incur an additional 5% when purchasing a second home.
How much can I borrow with a LTB / BTL mortgage?
One of the main factors lenders consider when assessing a let-to-buy mortgage is whether the expected rental income is sufficient to support the borrowing.
Lenders use an Interest Coverage Ratio (ICR) to calculate the minimum rent they require. This is based on a notional interest rate and a percentage set by the lender. The calculation can vary depending on the lender, mortgage type and your tax circumstances.
For illustration, here's how a lender might calculate the rental income required:
Mortgage Amount £200,000 x 6% (could be the lenders pay rate plus 2%) x 145%
Example:
£200,000 x 6.% = £12,000 annual mortgage interest x 125%* = £15,000 Annual Rent Requirement (£1250 each month)
*some lenders may adopt a higher rate of 145%, depending on your tax status / borrowing requirements.
This is an illustrative example only. Actual rental income requirements will vary between lenders and may be calculated using different stress rates and ICR percentages.
Frequently Asked Questions About Let-to-Buy Mortgages
Can I keep my current home and buy another?
Yes. A let-to-buy mortgage may allow you to remortgage your current property onto a buy-to-let mortgage, rent it out and arrange a separate residential mortgage for your next home. You'll need to meet the relevant lender criteria for both mortgages.
How much deposit do I need for a let-to-buy mortgage?
The deposit required for your new home will depend on the lender and your circumstances. The equity released from your existing property may be used towards the deposit, provided the lender allows it and there is sufficient equity available.
Do I need to rent out my existing property before applying?
Usually, you don't need to have tenants in place before applying. However, lenders will generally want evidence of the expected rental income, often supported by an estimate from a local letting agent.
Can I use the rental income to help me get a mortgage on my new home?
Potentially. Some lenders will take rental income into account when assessing affordability, while others assess the existing buy-to-let mortgage differently. The approach varies between lenders.
Will I pay extra Stamp Duty if I keep my current home?
You may have to pay the higher rate of Stamp Duty Land Tax when purchasing your next home if you retain ownership of your existing property. The rules depend on your circumstances, so it's important to check the position before proceeding.
Is let-to-buy the same as buy-to-let?
No. A buy-to-let mortgage is generally used to purchase or remortgage a property intended for rental. A let-to-buy mortgage is specifically used when you want to move home, keep your existing property and rent it out while buying somewhere else to live.
Looking for more information? Check out our Learning Centre for more helpful, including:
As you can see securing a BTL / LTB mortgage can prove challenging, then add your new residential mortgage into the equation and you are left with plenty to think about! An experienced mortgage adviser will very quickly provide you with a thorough understanding of your options and whether keeping your current home is achievable when moving on. Ready to discuss further?
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Not all Buy to Let Mortgages are regulated by the Financial Conduct Authority
Written and Published: 31 May 2023 | Last updated: 30 October 2026 by Adrian Collins, Founder of Beechwood Mortgages (FCA Ref: 219335). Reviewed and Approved by Stonebridge Mortgage Solutions Limited, which is authorised and regulated by the Financial Conduct Authority (FCA Ref: 454811).
