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Turning your residential mortgage into buy-to-let

Updated: Mar 2, 2021

If you decide to rent out the property you’re living in to someone else, you’ll have to switch your standard residential mortgage to a buy-to-let mortgage.

You’ll have to get permission from your lender to do this. If you don’t change your mortgage, you risk invalidating your mortgage contract and being asked to repay your whole loan at once.

Then when you start considering things like fixed rates and fees, it can get complicated, so check with your broker on the best thing to do first.

(Don’t forget to upgrade your buildings insurance to landlord’s insurance. And make sure you understand all your responsibilities as a landlord.)

Letting out your home during your residential mortgage

If you have a residential mortgage already, and you want to let out your home for a specified period of time – a year, say – you can ask your current lender for a “consent to let” mortgage. This is different from a buy-to-let mortgage, where you make your intentions to let clear from the beginning.

That’s because consent to let is seen as a temporary thing – you won’t be able to keep asking for several in a row.

During the consent to let period, lenders will usually raise the interest rate (because you renting out your home means more risk for them). Then when the period comes to an end, if you want to continue renting out your home, you can remortgage onto a buy-to-let mortgage.

Let-to-buy: moving to a new home, renting out your old home

If you want to rent out a home you already own, and at the same time buy another home to live in yourself, then let-to-buy is for you.

Let-to-buy is a way to apply for two types of mortgages at the same time:

  1. A buy-to-let remortgage for the property you’re moving out of and intend to let out

  2. A standard residential mortgage for your new home

Finding two good deals at the same time that are each right for you and work together might be a challenge if you go it alone. A mortgage broker can help you make sense of let-to-buy and find the right mortgages for you.

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You might want to save money with a better rate. Or borrow more money to buy another property. Either way, remortgaging your buy-to-let mortgage is usually pretty straightforward. Most lenders won’t l

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