Let to Buy

A Let-to-Buy mortgage first came to fruition in the early 1990's but has never been a popular option as a lot of people get confused between the phrases Let-to-Buy and Buy-to-Let.

A Let-to-Buy mortgage means that you can buy and move into a new home whilst keeping your existing home and renting it. This means that you can have 2 residential mortgages as the proposed rental income from your existing home is used to pay your existing mortgage.

If a lender is prepared to offer a Let-to-Buy mortgage they will usually exclude your current mortgage(as long as the rental income covers the mortgage payments) and offer a mortgage for a new property based on normal income multiples. This type of mortgage differs from a Buy-to-Let as the interest rate for this will be slightly lower.

If you are finding it difficult to sell your home, this may be the option for you. To make sure your house is 'lettable' it would be a good idea to ask a local letting agent to give you an opinion and also carry out any repairs that might put off potential tenants.

NB Please note that if your home is 'let' for more than 3 years you are legible for Capital Gains Tax. This is payable on the difference in the value of your home when it became a second home and the price at which it is eventually sold. A good accountant would be able to tell you how to minimise the amount of Capital Gains Tax.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE