Changing your mortgage to Buy to Let

Can I switch my residential mortgage to a Buy to Let? How does it work?

You can. If you’ve moved out of your property you can change your residential mortgage to a Buy to Let. Initially, you can get something called ‘Consent to Let’ with your lender – you’d have to apply for that, but most lenders will allow it.

The other option is to remortgage the property onto a Buy to Let mortgage. That’s more of a permanent solution.

How much equity do you need to switch to a Buy to Let mortgage?

Lenders typically require at least 25% equity in the property – in other words, a 75% Loan to Value ratio. Some lenders may do 80%, but I advise clients to aim for 25% equity.

What’s the process when changing from a regular mortgage to a Buy to Let?

The first thing to do is speak to your current lender. That’s the easiest and quickest process. The second one is to get professional advice from a mortgage broker. We can help you compare rates with other lenders and support you on a Let to Buy or Buy to Let application.

Do check your property value, too, because you do need that 25% equity.

What criteria do I need to meet to change my mortgage to a Buy to Let?

Obviously, the property needs to be in your name. You can’t change someone else’s property to a Buy to Let – you need to own it. Have a good credit history because that helps you find a good rate.

You’ll need to prove that the equity is there, and most lenders want a minimum of £25,000 in income. Age also comes into account when you’re looking to change your residential to a Buy to Let mortgage.

What happens if you rent your property and don’t change your mortgage to a Buy to Let product?

If you rent your home out without your lender’s permission, you’re likely breaching your mortgage terms and conditions. The consequences could include being put in default by the lender, or them demanding full repayment of the mortgage.

There may be insurance issues, too, as you don’t have the right cover to let out your property. Just make sure that everyone is informed and it’s all above board before you let out your property.

What is Consent to Let? What does this mean?

Consent to Let is asking the lender you’ve currently got your residential mortgage with for permission to let out the property.

It’s usually a temporary agreement for six to 12 months, and the lender will advise you once the current fixed period or term ends that you need to remortgage to a new lender for a Buy to Let mortgage. For that temporary period, you have Consent to Let.