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Switching to a Buy To Let Mortgage

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 13th February 2020 *

This article is about changing from a residential to a buy to let mortgage. See our article for switching a buy to let mortgage to a residential mortgage.


Whether you’re moving out into a new property or remortgaging an existing property to get a buy-to-let mortgage, there are a few things to keep in mind that will help make sure you get the best deal possible.

Many of our customers ask how to change their mortgage to buy-to-let, and the answer depends on the type of mortgage that is currently registered over the property, what you’ll be doing with the property (who you’ll rent it to), where you’ll be living going forward, and how many other properties you own.

In this article, we'll be looking at the following: 


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How can I change my mortgage to a buy-to-let?

Your ability to change your residential mortgage to a buy-to-let one will depend on your property type, your personal circumstances, and the mortgage terms and conditions stated in your original agreement. Ultimately, it will be down to the mortgage provider to give their consent to your request.

I'm changing my main residence to buy-to-let and moving into a rented property

If you’re planning to move out of your property and into rented accommodation, you may find that some lenders are reluctant to change your residential mortgage into a buy-to-let one.

It sounds strange, but while some lenders may be happy to provide this service, others might not be. This is often because of the risks to the lender if the borrower decides not to repay.

It's also because some buy-to-let lenders are wary of fraud, as customers may request to change their mortgage to a buy-to-let with the intention of living in the property themselves whilst earning income from their tenants.

In order for a lender to change your mortgage type, they will likely ask you to prove your projected rental income. Your interest rate may increase once you switch to buy-to-let, so to see if you can afford to keep up with the monthly payments, your rental income should be 125–140% of the mortgage repayment (at the time of writing).

If you stay with your current lender, you may be missing out on the best buy-to-let switch rates available. Make an enquiry to see if you could get a better deal.

If you are changing your main residence to buy-to-let and buying a new property

Helping customers buy a new property and rent their old one out is becoming a very common enquiry for us. We think this is in part due to poor interest rates for savings in the bank, and the fact many people are now looking for better ways to save money.

It may also be because of the drop in house prices and the general consensus that property will begin to increase in value over the next few years, so customers with the capacity to take on two mortgage products are favouring renting over selling in the short term.

There are two ways of doing this: a let to buy mortgage or obtaining consent to let. We break down the difference between these options below...

Let to buy mortgages 

A let to buy mortgage is where you buy a new property to live in on a new main residential mortgage, and renting out your old property by switching your old mortgage to a buy-to-let.

You can also raise cash on your current property to fund a deposit on the new purchase, if there's enough equity available in it. This is called a second charge mortgage, a type of secured loan where you can take out up to the amount of available equity on your property; so it could be a viable option if you need to raise funds for a deposit. For more information on second charge loans, make an enquiry today.

Some lenders have an issue with let to buy arrangements, because it poses a potential risk to their security if there is a gap in tenancy and the borrowers are pressured to pay both mortgages. This risk can be heightened considerably if the borrowers are prospective landlords with no rental experience, other income or other security.

Consent to let mortgages

If you have a good mortgage deal (some of the historical tracker deals are under 1% currently), then it may be worth looking to ask your current lender permission to let the property out under the current mortgage contract, thus transferring the debt from one place to another.

They are not obliged to accept, but it’s worth considering, especially if you are going into rented, or buying a new property in cash, or you are unable to port your existing mortgage (see below). If your application is declined, then you will need to remortgage onto a buy-to-let deal.

As a consent to let mortgage will still technically mean that your rental property is on a residential mortgage, it can effect which lenders will offer you a new mortgage for your next property. This is because there’s usually a limit to the number of residential mortgages you can have, though some lenders allow two. Others may even be willing to lend up to four and beyond so long as you can prove affordability.

Is it illegal to rent out a property without a buy-to-let mortgage?

While technically not illegal, you could be in breach of contract between you and your mortgage lender. If you do let out your property without converting the mortgage into a buy-to-let, mortgage lenders could potentially demand the whole mortgage be paid instantly.

To avoid this, you should notify your mortgage lender as soon as possible. The same applies if you become an “accidental landlord”, for example if you need to move and you’re struggling to find a buyer and want to let it out in the meantime.

For more information about converting your residential mortgage into a buy-to-let one, as well as how to apply for this, make an enquiry.

How soon can you remortgage a buy-to-let?

It depends on your mortgage lender. Some won’t allow you to remortgage within six months of ownership, though sometimes it can be longer. Consent to let may also be restricted, depending on how long the property has been owned for.

Are buy-to-let mortgages more expensive?

Buy-to-lets typically have more associated costs compared with residential mortgages, though this also depends on the lender and how they calculated BTL mortgage loans, as well as your personal circumstances.  

You can expect to put down a larger deposit (25% of the property’s value is typical for BTL deposits, for example), increased stamp tax, and potentially higher fees. You could also expect higher mortgage rates, especially if your loan-to-value is higher as the lender would need to recoup more money in the event of a default.

Read our guide for more information about the potential associated costs for buy-to-let mortgages. You can also find an online buy to let mortgage calculator on our website, if you're looking for a rough idea about the type of quote you might be offered.

Speak with an expert broker

If you're looking to convert your current residential mortgage into a buy-to-let mortgage, speak with one of the expert brokers we work with.

They are experts when it comes to rental properties and they arrange these deals every day, making them best positioned to offer the best advice for your circumstances and find the best mortgage deals via their 'whole-of-market' access. Make an enquiry to get started.


IMPORTANT: Keep in mind portability – This is where you move your mortgage to another property and keep the same rate. If your current mortgage is a good one then it may certainly be worth doing, and any advisor worth their salt would always recommend you keeping your current deal if it cannot be beaten elsewhere.



Updated: 13th February 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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Looking for specialist advice? Read through our articles about different types of buy to let situations, and how best to prepare yourself to find the right mortgage for you