4.97 out of 5 based on 2,400+ reviews
4.97 out of 5 based on 2,400+ reviews
We set out how a Let to Buy mortgage works, how it can help you release equity from your home, how lenders may work out how much you may be able to borrow and typical Let to Buy lending criteria.
Rated 4.97 out of 5 from 2,400+ reviews
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
A Let to Buy mortgage refinances your main residence and changes its permitted use so you can let it out. The new mortgage usually releases equity as a deposit for a new home.
A Let to Buy mortgage allows you to refinance your main residence and change its permitted use so you can let the property. At the same time, you can release equity as a deposit for a new residential home.
A Let to Buy mortgage is different from a buy to let mortgage. It is designed for homeowners letting a property they have lived in, which may be classed as consumer buy to let, and some lenders may take into account that the property has not been let before.
For example, your current home is worth £750,000, it would let for £3,000 a month and your current mortgage is £300,000. You are a basic-rate taxpayer and would choose a five-year fixed rate.
You have found a home you would like to buy for £1,500,000 but do not have a buyer for your current home and only £250,000 as a cash deposit.
Without a sale of the current home
| Purchase price | £1,500,000 |
| Stamp duty | + £168,750 |
| Less cash deposit | − £250,000 |
| Mortgage required | approx £1,418,750 |
| Loan to value | Over 90% |
With a Let to Buy mortgage
| Current home value | £750,000 |
| Let to Buy mortgage at 75% loan to value | £562,500 |
| Repays the current mortgage | − £300,000 |
| Equity released | £262,500 |
This is based on a 75% loan to value Let to Buy mortgage, which would repay the current mortgage and release equity. The amount a lender will offer depends on its own rental cover and stressed rate requirements, and rental income is not guaranteed. At a typical rental cover of 125% and a stressed rate of 4.5%, rent of £3,000 a month may support a loan of up to about £640,000, so the 75% loan to value limit is what applies here. For a higher-rate taxpayer, or on a shorter fixed rate, the same rent may support a lower loan, for example about £451,000 at 145% rental cover and a 5.5% stressed rate. That would reduce the equity released and increase the mortgage needed for your new home.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
Your onward purchase
| Purchase price | £1,500,000 |
| Stamp duty | + £168,750 |
| Less cash deposit | − £250,000 |
| Less equity released | − £262,500 |
| New mortgage | £1,156,250 |
| Loan to value | 77% |
The new mortgage for the onward purchase is now £1,156,250, or 77% loan to value. A lower loan to value may fall within more lenders’ criteria and may give access to a wider range of mortgage products.
Illustrative example only. Stamp duty uses the higher rates for additional residential property in England and Northern Ireland from 1 April 2025. Figures are not guaranteed and are not a recommendation that any particular mortgage is suitable for you.
The difference between a buy to let and a Let to Buy mortgage is mainly to do with regulation and whether a lender will accept the change of use. The mortgage on a home you live in is usually a regulated mortgage contract, regulated by the Financial Conduct Authority (FCA).
Most buy to let mortgages are not regulated by the FCA. However, a Let to Buy mortgage may be classed as consumer buy to let, which carries additional protections for borrowers.
Because the property was your home rather than bought as an investment, you may be treated as an “accidental landlord”, and the mortgage may fall under the consumer buy to let rules.
Where a Let to Buy mortgage is classed as consumer buy to let, the lender must follow the consumer buy to let rules, which include additional checks and protections for borrowers. Some lenders may not offer Let to Buy mortgages at all, or may offer a separate Let to Buy product range.
Let to Buy mortgage rates may be similar to those for buy to let products, although some lenders may price Let to Buy at a premium. Rates depend on your circumstances and the lender’s criteria.
Let to Buy lending criteria vary between lenders. Some lenders may require the Let to Buy to be completed at the same time as your onward purchase. This can be restrictive, as you may need the equity released to pay the deposit on exchange of contracts, which is typically 10% of the purchase price.
Other lenders may consider a Let to Buy mortgage where there may be a delay to the purchase of your new main residence, or where you are moving into a rented property. There may be additional checks in these cases. For example, the lender may wish to see the mortgage offer for your new purchase or, if you are moving into rented accommodation, the tenancy agreement and evidence that you have moved out of your current home. This will depend on each lender’s Let to Buy lending criteria.
You do not need to be an experienced landlord to apply for a Let to Buy mortgage. Some lenders may consider first-time landlords, subject to their own criteria. Where the mortgage is classed as consumer buy to let, additional regulatory protections may apply.
Some lenders may limit the maximum loan to value for a Let to Buy mortgage, typically to around 75% to 80%.
Some lenders may apply a maximum age limit. Others may consider a mortgage term that extends beyond age 80, subject to their own criteria.
Some lenders may offer Let to Buy mortgages on an interest-only basis. With an interest-only mortgage, the capital remains outstanding throughout the mortgage term and must be repaid at the end of the term. Some lenders may accept the proposed sale of the let property as the repayment strategy, subject to their own criteria.
It is important to receive advice from a tax adviser and mortgage broker before making any decisions on taking a Let to Buy mortgage. The suitability of this type of mortgage will very much depend on your individual circumstances and requirements.
As you will be letting your home, you will need to meet the legal requirements for landlords. In England, a rented home must currently have an Energy Performance Certificate (EPC) rating of at least E, unless an exemption applies (GOV.UK guidance). You must arrange a gas safety check every year and an Electrical Installation Condition Report (EICR) at least every five years. Requirements differ elsewhere in the UK. Some lenders may also check these as part of their Let to Buy lending criteria.
The amount you can borrow on a Let to Buy mortgage will usually depend mainly on the rent your property could achieve. The lender’s valuer will normally assess the market rent. As a general guide, some lenders may use this calculation:
Annual rent ÷ rental cover ÷ stressed rate = maximum mortgage
Example 1
A higher-rate taxpayer lets out their home for £30,000 a year on a two-year fixed-rate mortgage.
£30,000 annual rent ÷ 145% ÷ 5.5% = about £376,176
Example 2
A basic-rate taxpayer lets out their home for £30,000 a year on a five-year fixed-rate mortgage.
£30,000 annual rent ÷ 125% ÷ 4.5% = about £533,333
Illustrative examples only. The maximum loan will also be limited by the lender’s loan to value limit and its own criteria.
It is also important to consider that your onward mortgage may be affected by the Let to Buy borrowing. Some lenders may want to see a signed tenancy agreement before they leave the Let to Buy mortgage payment out of your outgoings.
Your new lender will need to be satisfied that you can afford the new mortgage alongside the Let to Buy payment, or be willing to take the expected rent into account.
Estimated Let to Buy mortgage
Loan to value
Of your home’s value of
Estimated equity released
| Purchase price | |
|---|---|
| Estimated stamp duty higher rates | |
| Your cash deposit | |
| Equity released from your current home | |
| Left on your current mortgage after the Let to Buy | |
| Mortgage needed for your new home |
Mortgage you may be able to borrow
Based on your income
Loan to value
Of the purchase price
Shortfall
The loan to value on your new home is above 90%. Fewer lenders may consider lending at this level, which could affect whether this plan is possible.
A shortfall means you may need more cash or a lower purchase price, or a lender willing to lend more based on your circumstances. An adviser can talk you through your options.
Stamp duty is estimated at the higher rates for additional residential property in England and Northern Ireland, because you would own two homes when you complete. Different taxes apply in Scotland and Wales. Stamp duty is collected by HM Revenue & Customs (HMRC).
Total borrowing across both mortgages:
These figures use simplified assumptions for illustration only. Each lender assesses income and affordability using its own methodology, which may differ from the approach below. Let to Buy: this estimate assumes a maximum loan of 75% of your home’s value. It tests whether the rent covers 145% of the interest at an illustrative 5% stressed rate (some lenders may use a higher stressed rate, particularly for fixed rates of less than five years), and usually uses the lower of the two amounts. It does not include extra borrowing a lender may allow by taking your personal income into account alongside the rent (known as top slicing). The Let to Buy mortgage first repays your current mortgage; anything left over is equity for your purchase. Your new home: the purchase price plus stamp duty at the higher rates, less your cash and the equity released, is the mortgage you need. The estimate compares that with an illustrative 5.5 times your household income. Lenders may also take your Let to Buy mortgage payment into account, so the amount available could be lower. Lender criteria vary and change, so the amounts available to you could be lower or higher.
Your report
A PDF of both mortgages, the stamp duty and how we worked them out, with a copy emailed to you.
We’ll email your results to this address. Ticking the box is optional. If you ask for a call, an adviser will use your name and number to contact you. Our privacy policy explains how we use your information, and our Terms of Business explain how we work with you.
Your report
Our advisers compare over 300 lenders, including private banks, to help identify a suitable way to fund your move while keeping your current home.
Your home or property 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.
The information provided by these calculators is for illustrative purposes only and does not constitute a mortgage offer, decision in principle or mortgage advice. This information does not contain all of the details you need to choose a mortgage. The results should not be the sole basis for a financial decision and depend on your individual circumstances and lender criteria.
The Let to Buy estimate uses typical lender assumptions for rental cover and loan to value. Some lenders may also take personal income into account alongside the rent. The estimate for your new home uses an illustrative income multiple. Where your income is used to support the Let to Buy mortgage, lenders may take this into account when assessing the mortgage for your new home, so the amount available could be lower than shown. Lender criteria vary and change, so the amounts available to you could be lower or higher. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
The information provided is for general information purposes only and does not constitute tax advice. Stamp Duty Land Tax rates, thresholds and reliefs are based on current HMRC rules, which may change and will depend on your individual circumstances. You should seek independent tax advice where appropriate.
The results generated by this calculator are estimates only and are provided for illustrative purposes. The actual amount of Stamp Duty Land Tax payable may vary depending on your individual circumstances and eligibility for any reliefs or exemptions.
Consent to let is the process of applying for permission from your current lender to let your current home. Some lenders may limit how long consent to let lasts and may add a charge or increase your interest rate while it applies. Consent to let does not usually allow you to increase your borrowing, which may be key to funding your onward purchase.
Consent to let may be more suitable if you are only looking to let the property for a short period of time, for example if relocating for work for a short period. Consent to let may avoid some of the valuation and legal fees involved in remortgaging.
Not all lenders offer consent to let, so a Let to Buy mortgage may be an option to consider if you plan to let your current home. Your lender may ask about your plans. If you are buying a new home and intend to keep your current home as a long-term let, some lenders may be less likely to grant consent to let.
Lenders that offer Let to Buy mortgages are often those that also offer buy to let and residential mortgages, as the consumer buy to let rules overlap with residential mortgage requirements.
Because a Let to Buy mortgage usually runs alongside a second, residential mortgage application, it may help to work with a mortgage broker who has experience of Let to Buy. You will also need a solicitor who can act on both mortgages, which can help keep communication simpler and the legal process better coordinated.
Some lenders may offer Let to Buy mortgages only through brokers. Private Finance compares over 300 lenders and can assist with sourcing and managing the application process from start to finish.
As you will be keeping your current home, you are likely to pay the higher rates of SDLT on your new home. These are currently 5 percentage points above the standard rates and apply to the whole purchase price. The additional cost can be significant.
If you sell your previous main residence within three years of buying your new home, you may be able to claim a refund of the higher-rates element from HM Revenue & Customs (HMRC). The claim must normally be made within 12 months of the sale, or within 12 months of the filing date of the SDLT return for your new home, whichever is later. Because a Let to Buy usually involves keeping your current home, this refund may not apply. A further 2% surcharge may apply if you are not resident in the UK. Different taxes apply in Scotland and Wales. Try our stamp duty calculator to estimate this cost.
Author: Edward Checkley, Managing Director
If you are thinking about buying, moving or remortgaging, our advisers can review your circumstances and help identify options that may be suitable for you. Private Finance compares over 300 lenders. Call us, email info@privatefinance.co.uk or use the enquiry form below.
This article is based on information available on the date of issue, 13 November 2026.
This content is for general information only and does not constitute financial, legal or professional advice, nor should it be interpreted as a recommendation.
Any figures, examples or market commentary are illustrative and based on information available at the time of writing, unless otherwise stated. They should not be taken as a prediction of future interest rates, mortgage costs or property prices. Past trends are not a reliable indicator of future market movements.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
The information provided is for general information purposes only and does not constitute tax advice. The tax treatment referred to is based on current tax rules, which may change and will depend on your individual circumstances. Before proceeding, we strongly recommend consulting a qualified tax adviser.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Whatever your situation, our mortgage team can advise on suitable solutions. We specialise in complex and bespoke mortgage solutions to help you find competitive terms.
Residential Mortgages
Specialist Mortgages
Buy to Let Mortgages
Mortgages by Profession