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Change to a buy-to-let mortgage when you want to rent your property out.
Looking to change to a Buy-to-Let Mortgage? Our mortgage advisors are here to help you secure the right product for your needs, whatever your circumstances.
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Remortgaging
Remortgaging doesn’t have to be tricky, whether you are looking to remortgage to consolidate debt, buy another property or finance home improvements.
At some point after getting your residential mortgage approved, you might wonder if you can instead rent the property out. That’s doable if you change to a Buy to Let mortgage.
Should you make that shift, though? If so, where would you go to switch mortgage plans, and what risks are involved? We understand all this could be uncharted waters for you, and you probably have more questions running around in your mind. Our team is ready to step in and walk you through the process to successfully make the switch.
How to Change to a Buy-to-Let Mortgage
At some point after getting your residential mortgage approved, you might wonder if you can instead rent the property out. That’s doable if you change from your residential mortgage to a Buy to Let mortgage. Buy to let properties work differently to your standard residential property, though, so you’ll need the support of a specialist mortgage advisor if you want to make the switch.
But should you make that shift, though? And if so, where would you go to switch mortgage plans, and what risks are involved? We understand all this could be uncharted waters for you, and you probably have more questions running around in your mind. Our team is ready to step in and walk you through the process to successfully make the switch if you determine that it’s right for you.
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When you think you’ve hit that brick wall and have all but given up hope of finding mortgage finance, When the Bank Says No are here to turn your ‘No’ into a ‘Yes’. We have access to a range of specialist lenders who are willing to help those that the High Street banks just won’t touch. Get in touch today and see how we can turn your dreams into a reality.
Changing to a Buy-to-Let Mortgage FAQs
Can I switch from a residential mortgage to a Buy-to-Let mortgage?
Yes! It’s entirely possible to change from existing residential mortgages to a Buy to Let mortgage if you want to move out of the property and start renting it. You can do that with the same lender that you’re currently in a contract with or a different mortgage lender altogether.
Choosing between your current mortgage lender or switching mortgages to another can be difficult – but we’ll cover that in a later FAQ to help you determine the best course of action.
However, the mortgage change process can drag on and come with extra fees. Don’t hesitate to reach out to our team of advisors for more details on the best way to proceed!
Why bother switching to a Buy to Let mortgage?
We’ve seen people choose to change their mortgages to Buy to Let for a variety of reasons, and many of them are valid. Usually, the switch is a good move if:
- You’re buying a new property. (An upgrade, hopefully!)
- You’re moving in with a partner.
- You’ll be travelling for the foreseeable future.
In cases like this, you won’t be able to rent out your residential-mortgage home without getting the lender’s permission.
Assuming that you don’t want to sell the home right now, you’ll have to go one of two ways: leave the property uninhabited and keep covering the payments or look for a legal way to rent it. If you decide to go with the latter, changing to a Buy to Let mortgage could be the answer.
Plus, since many Buy to Let mortgages are interest only, the switch can be a tempting opportunity to ease financial strain compared to conventional repayment plans.
How can I change from a residential mortgage to a Buy to Let mortgage?
So, you’re ready to change your mortgage and become a landlord! The first step would be to get in touch with your current lender and ask if they’re willing to make the mortgage switch.
Odds are, they’ll run a new affordability assessment before giving you a conclusive answer. Once they get back to you with a plan, you’ll get to judge if the rates will work for you.
We’d recommend getting professional advice from an experienced mortgage broker from When the Bank Says No to help you get the best deal. Talk to one of our advisors today and get the mortgage change process started!
Is my lender likely to approve the switch to a Buy to Let mortgage?
That’s a tricky question. Lenders might find Buy to Let mortgages riskier than residential ones. Instead of just focusing on your earnings when they’re doing the affordability checks, they’ll probably want to look at the projected rental income for your property.
It sounds like too much effort, but they only want to make sure that you’ll be able to afford the payments after the mortgage change. Yes, even if you face issues with your tenants when your home becomes a rental property.
Your current mortgage provider may approve the change to Buy to Let if they find that your projected rental income is 125% of your monthly mortgage payment. Others might set the bar even higher.
I'm a first-time owner. Will my lender approve the mortgage switch?
Getting a Buy to Let mortgage as a first-time homeowner is challenging but not impossible. The same applies to changing your first mortgage from residential to Buy to Let.
In most cases, you’ll have fewer options and will have to pay higher deposits as well. That’s because many lenders could view the situation as a high risk.
Don’t let all that discourage you, though! Here at When the Bank Says No, our friendly team of advisors is happy to help you change that mortgage and become a first-time landlord with as little hassle as possible.
If I make the switch to Buy to Let, can I still live on the property?
No, once you change your residential mortgage to a Buy to Let, you’re no longer allowed to live on the property. If you do that, you’re breaching the contract you have with your lender, and that would be considered fraud and you could face serious consequences as a result.
This also means that you can’t switch to a Buy to Let mortgage just to rent one room and keep on living on the same property. Even letting the property to an immediate family member at a reduced rent is off the table.
The only legal way to live on your property once again is to change your Buy to Let mortgage back to a residential mortgage. So, to avoid the extra hassle, think carefully about your living arrangements before making the switch in the first place.
Is changing to a Buy to Let mortgage a smart financial move?
Making the move from a residential property to Buy to Let property can be a good investment in the long term. Yet, it depends on how the market is looking when you decide to make the mortgage shift. Supply and demand also play a huge role in whether it’s a smart financial move or not.
If you notice slow price growth for the properties in your area with strong rental growth, then going for a Buy to Let with a mortgage lender could be worthwhile.
However, it’s important to note that every case is different, and you still need to factor in whether you’re in a financial position to buy (or even rent) a second property to actually live yourself.
How does changing to a Buy to Let mortgage on a Help to Buy home work?
My lender didn’t approve the switch to Buy to Let. What now?
Don’t fret; you’re not out of options just yet.
If your lender denied your request to change your residential mortgage to a Buy to Let one, you can opt for one of two alternative solutions:
- Look to remortgage your property with a different lender.
- Try to get Consent to Let from your current lender.
Should I change to Buy to Let or just get Consent to Let?
Ideally, getting Consent to Let would be a smart move if you only need to rent out your property temporarily and are happy with the rates your current lender is offering.
This way, you don’t have to throw away your existing mortgage plan altogether, and you’ll get to return to your home as a property with a regular residential mortgage later on. That said, you might have to put up with additional fees.
Of course, lenders don’t have to grant you Consent to Let. They could refuse for a lot of reasons, including a long renting duration or a low projected rent income.
So, if your request for Consent to Let gets denied, or you’re planning to rent for a long period, swapping to a Buy to Let mortgage might be the obvious choice.
Is it better to change my mortgage with my current lender?
To switch from a residential to a Buy to Let mortgage, you can either stay with the same lender or remortgage with a new provider. Each option has its perks and drawbacks.
Switching to Buy to Let with your existing lender could be better in the following situations:
- You’re happy with the rates offered by your lender.
- You don’t want to shoulder a high early repayment or exit fees for the mortgage term.
- Time isn’t on your side.
- You’re not certain that the new lender will like your current financial situation.
- Your lender offers tempting loyalty discounts.
On the other hand, there could be merit in remortgaging with a new provider. For one, it’ll expand your options and boost your chances of getting a great deal on your Buy to Let mortgage.
It doesn’t hurt to take a shop around and compare rates, anyway. Even if you decide to go with the same lender in the end, at least you’ll know that you got the best pick out of all the deals out there.
My credit took a hit recently. Can I still change to a Buy to Let mortgage?
Yes, even with bad credit, it’s possible to find lenders who are willing to help you with the remortgage process. However, your options will most likely be limited.
You might have a better shot if you choose to change your product with the same lender who approved your existing residential mortgage. They might skip the second credit check when they’re switching you to a Buy to Let mortgage.
How soon can I change to a Buy to Let mortgage?
The process could take four or even eight weeks. However, the exact duration will vary based on a few factors.
For one, the product transfer process can be over faster if you use your existing lender. In this case, it could take only a few days. Plus, a skilled mortgage advisor can help keep the delays to a minimum if you have to change lenders.
It’s also important to note that you might not be able to change to a new mortgage right away. Some mortgage lenders will deny the request altogether for the first six months. So, keep that in mind when you’re planning the renting timeline.
Can I just rent out my home without making the switch to a Buy to Let mortgage?
No, letting a home on a residential mortgage would be considered a breach of contract. In this case, the lender can retract the loan and request their money back.
You have to either remortgage to Buy to Let or get Consent to Let. Even if you end up with exit fees, it’s still better than being in breach of contract and having to pay the full amount straight away.
Are there any drawbacks to changing to a Buy to Let mortgage?
If you decide to turn your residential mortgage into Buy to Let, you have to be serious about renting the property. That means putting the time and effort in to being a landlord that keeps their property up to date and filled with tenants whenever possible.
Gaps between tenancies can hurt your ability to keep up with your mortgage repayments on time. Even when you’re not renting, you still have to meet your mortgage payments, home insurance, and maintenance fees.
That’s why it’s essential to consider the supply and demand in your area. It doesn’t hurt to have some experience in managing and letting properties, too.
You also need to consider the capital gains and income taxes that you’ll have to pay as a landlord. Keep in mind that there could be a significant stamp duty to pay as well, compared to when the property was considered residential.
Would I need to change my insurance as well?
Is changing from a residential to a Buy to Let mortgage expensive?
Would I need to change my insurance as well?
What Our customers say about us
Our Customers rank us 4.6 out of 5
We feel so fortunate to have found WTBSN
We found WTBSN after landing in a really tricky situation. We were out of term on our current mortgage and our existing broker had exhausted all options to re-mortgage due to the complex nature of our holiday let property (Grade II listed, timber frame construction and above commercial). Working under considerable time pressure due to the financial penalties being imposed by the existing lender, Brian was relentless in his search for a solution that would allow us to refinance a property that was on face value mortgageable. Thankfully, he didn’t give up and nine months later, we completed on the re-finance. We feel so fortunate to have found WTBSN and would like to thank Brian and the team sincerely for going the extra mile. We couldn’t have done it without you!
Rachel Reeves
Simply the best
I will never use another mortgage broker in all my time In property, these guys are the best at communication, customer service and keeping you informed. They are a level above every other broker I’ve come across and they actually get things done.
Emma, Samantha & Ashley have been fantastic in assisting me with 2 mortgages now and they’re superb at what they do. I wouldn’t hesitate to reccommend them to anybody out there who needs a mortgage sorting.
John Burton
I have been dealing with ben
I have been dealing with Ben @ When The Bank Says No. He has been great!! Professional, kept us up to date the whole way and made the entire process so simple. I would most definitely use him again and have already passed his details on to a family member. Thank you for all your help.
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Thank you for your amazing support and service during a really difficult time in my life. 5* is just not enough to demonstrate the level of support received. These guys go above and beyond. A personal service, with kindness and compassion. I highly recommend. If you’re struggling with your mortgage, then have a chat to this team. I cannot thank them enough for everything they have done.
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