How to Buy a New Home Without Selling Your Current One
A let to buy mortgage lets you keep your existing property as a rental while buying somewhere new to live. Instead of selling up to fund the next purchase, you convert your current mortgage onto a buy-to-let basis and take out a fresh residential mortgage on the property you are moving into.
It solves a specific problem: you want to move, but selling first means a chain, a rush, or losing a property you have not sold anything to fund yet. A let to buy mortgage separates the two transactions and lets you move at your own pace.
Who Actually Uses a Let to Buy Mortgage
The scenario comes up more often than the name suggests. Someone relocating for work who does not want to sell into a slow local market. A couple moving in together who each own a property and want to keep one as an investment rather than sell it. Parents downsizing while letting the family home to adult children or tenants. Anyone who has inherited a property and would rather let it than sell it, while still buying somewhere of their own.
What they have in common is equity already sitting in a property they are not ready, or not required, to give up.
How the Two Mortgages Work Together
A let to buy arrangement is really two separate mortgages running side by side. Your existing property moves onto a buy-to-let mortgage, assessed the same way any other buy-to-let application is: on rental income rather than personal salary, stress-tested against a higher rate than you will actually pay. Our guide to how buy-to-let mortgages work covers that assessment in full, since the mechanics are identical here.
The new property gets a standard residential mortgage, assessed conventionally on your income, deposit and outgoings, with the buy-to-let rental income and any released equity from the first property both taken into account.
Some lenders will handle both sides of the transaction. Others specialise in one or the other, which is where it helps to work with a broker who can place both halves with lenders that will actually say yes, rather than finding out midway through that one lender does not offer the other product.
A Worked Example
Take a homeowner with a property worth £350,000 and £150,000 left on the mortgage, leaving £200,000 of equity. They want to buy a new home for £450,000 and rent the existing one out.
The old property converts to a let to buy mortgage. At a representative pay rate of 5.25%, in line with current mortgage rates, the lender stress-tests at 7.25%, producing a stressed monthly interest figure of £906. Applying a 125% coverage requirement, the property needs to rent for at least £1,133 a month to qualify, comfortably achievable in most markets for a property of that value.
For the new purchase, they draw £90,000 of equity from the property they are converting, using it as a deposit and leaving £110,000 as a buffer. That brings the new residential mortgage to £360,000, or 80% loan to value, costing roughly £2,105 a month on a 25-year term at a representative 5%.
Two mortgages, two separate assessments, and equity from the older property doing real work to fund the deposit on the new one.
What This Costs Beyond the Rate
A let to buy mortgage means buying a second property while keeping the first, which attracts the additional property stamp duty surcharge on top of standard stamp duty on the new purchase. That is a real upfront cost worth pricing in before committing, not after.
Rental income from the converted property is also taxable, and mortgage interest on it only attracts a 20% tax credit rather than being deducted in full, the same rule that applies to any buy-to-let. Weigh the ongoing tax position alongside the monthly mortgage figures, not just the rate.
Consent to Let Versus Remortgaging
There are two routes to converting the first property, and they are not the same thing. Consent to let means asking your existing residential lender for permission to rent the property out temporarily, usually on your current rate, sometimes with a fee or a rate uplift attached. It tends to suit anyone who expects the arrangement to be short-term or who wants to avoid the cost of arranging a fresh mortgage.
Remortgaging onto a proper buy-to-let product replaces the existing mortgage entirely with one built for a rental property from the outset. It typically allows a higher loan amount, since buy-to-let lending is assessed on rental income rather than the terms of your old residential deal, and it suits anyone planning to keep the property let for the long term.
Which one makes more sense depends on how long you expect to keep letting the property, and what your current lender’s consent to let terms actually look like. Both are worth pricing out before deciding.
Getting the Timing Right
Because a let to buy mortgage runs two applications at once, timing matters more here than on a standard purchase or remortgage. The buy-to-let side needs to be agreed, or at minimum have a clear lender indication, before the new residential application goes in, since some lenders on the new purchase will want to see that the first property is properly funded as a rental rather than sitting as an unresolved liability.
A broker managing both applications together, as part of a wider mortgage strategy, can sequence this properly, rather than leaving you to coordinate two separate lenders on two separate timelines yourself.
Frequently Asked Questions
Can I get a let to buy mortgage with bad credit?
A let to buy mortgage is possible with adverse credit, but it depends on the severity and how recent it is.
Specialist lenders exist for both the buy-to-let and residential sides of a let to buy arrangement, and adverse credit narrows the panel rather than closing it entirely.
Do I need permission from my current lender to let my property?
Yes, if you are staying with the same lender under a consent to let arrangement.
If you remortgage onto a new buy-to-let product with a different lender, that new lender’s approval replaces the need for consent from the old one.
How much deposit do I need for the new property?
It depends on the lender and your circumstances, but 15 to 25% is typical.
Equity released from the property you are converting can often be used to fund some or all of it.
Is let to buy the same as buy to let?
Not quite.
Buy-to-let is purchasing a property specifically to rent out. Let to buy is converting a property you already live in into a rental, while buying somewhere new to live yourself, so it always involves two mortgages rather than one.
Will my rental income affect what I can borrow on the new home?
It can help.
Lenders on the new residential mortgage will typically consider the rental income from the let property, alongside your personal income, when assessing what you can afford to borrow on the new purchase.
Final Thoughts
A let to buy mortgage solves a genuine timing problem: moving home without being forced to sell first, while turning an existing property into an income-generating asset rather than a liability sitting on the market. It runs as two separate mortgage applications rather than one, and getting both placed with the right lenders, in the right order, is where the arrangement tends to succeed or stall.
UK Mortgage Broker is a whole-of-market broker helping clients throughout the UK and globally to secure funding on UK property. We are directly authorised and regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call: +44 1628 969 500
Email: info@uk-mortgagebroker.co.uk
Related Pages
- Types of Mortgage UK – Fixed, tracker, interest-only and repayment mortgages compared.
- Can I Get a Mortgage? – Eligibility criteria and what lenders check before approving an application.
- How Much Can I Borrow? – Income multiples and affordability on a new purchase.
- Mortgage Affordability UK Explained – How stress testing and affordability assessments work.
- Early Repayment Charges – What to check before leaving a deal early when converting to let.