Switching your mortgage when you want to rent your property out.

How to Change to a Buy-to-Let Mortgage

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.

Your home may be repossessed if you do not keep up repayments on your mortgage. When The Bank Says No is a mortgage broker, and not a lender.

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.

Changing to a Buy-to-Let Mortgage - FAQs

Yes! It’s entirely possible to change an existing residential mortgage 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.

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!

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 inhabited 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.

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 a 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!

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.

Some lenders will only 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.

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.

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, too.

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.

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.

Switching to a Buy to Let mortgage on a property you bought using a Help to Buy scheme can be very tricky. The Help to Buy guidelines state that you can’t let your home and buy a second property as an investment opportunity.

In fact, there are only a few situations where you’re even allowed to sublet the property without buying a new one.

You have to prove that your personal circumstances make it difficult or practically impossible to continue living in the Help to Buy home. This could include health-related issues, financial struggles, or sudden changes in work arrangements.

Even in these cases, you’ll probably still need to provide a letter from your lender stating that they won’t change your mortgage to a Buy to Let product. Once you repay your equity loan, you can consider making the swap.

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.

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.

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.

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.

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.

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.

If you decide to turn your residential mortgage into Buy to Let, you have to be serious about renting the property.

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.

Odds are, your lender requested building insurance before approving your residential mortgage. However, you’ll likely need to change your home insurance or at least go over your coverage plan once again before making the switch to Buy to Let.

After all, you’ll need wider coverage for all risks associated with renting a property.

While you might not need content insurance anymore, it could be wise to keep it—for your own sake, in case your tenant can’t cover damaged items.

Is changing from a residential to a Buy to Let mortgage expensive?

Buy to Let mortgages are generally more expensive than residential ones. That’s because lenders find them riskier, so they might cap the loan at around 75%.

You might have to readjust your deposit to at least 25%. Yes, even if the original residential mortgage had a 5–10% deposit with the same lender. There are early repayment charges to keep in mind as well.

That’s why some people choose to switch to Buy to Let mortgages only for properties that they’ve had for a long time. After a while, they manage to increase equity and reduce the mortgage amount with regular repayments.

Other costs to consider are the setup costs for the new mortgage. You might even end up with higher rates than what you were paying originally for the residential mortgage.

Don’t let that scare you away, though. Our team of expert advisors can help you navigate your way through the mortgage change and find the best deal for your circumstances. Call us today to get your remortgage journey started! 

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