Switching To A Buy-To-Let Mortgage

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Home Buy To Let Mortgages Switching To A Buy-To-Let Mortgage

Author: Pete Mugleston

Mortgage Advisor, MD

Reviewer: Jon Nixon

Director of Distribution

Updated: March 15, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

March 15, 2024

In this article, we’ll explain what you need to do with your mortgage if you want to start renting out your home, how a broker can help you find the best deal and what the alternatives might be to a buy-to-let mortgage.

Can you switch a residential mortgage to a buy-to-let mortgage?

Yes, it’s possible to change your residential mortgage to buy-to-let, but it involves remortgaging onto a new product either with a new lender or your current lender, assessing financial eligibility, obtaining a property valuation, and meeting specific buy-to-let mortgage criteria.

There are various reasons you may decide to start renting out your home, but the main ones are: you’re buying a new house, you’re moving to a new area or you’re relocating abroad, or you’re moving into another property with a partner.


Is this your only option?

No. If you intend to move back into your property at some point in the future, you may be better off requesting ‘consent to let’ from your lender. This is when your lender gives permission for you to rent out a room in your home or the entire property for a short period of time, typically for 6-12 months.

Your lender may charge you an admin fee for this and they could alter your interest rate. However, some lenders will do it for no additional charge and will keep the terms of your original deal the same.

How will your mortgage payments change?

You can use our calculator below to work out what your mortgage repayments will be after you’ve switched to buy-to-let.

Buy-to-Let Mortgage Calculator

Our buy-to-let mortgage calculator can show you how much your mortgage could cost you each month and overall. Simply enter the rental property value, deposit, anticipated monthly rent, interest rate, mortgage term and our calculator will do the rest.

Enter the value of the rental property here
A deposit of at least 20% is usually required for a buy-to-let mortgage
Most lenders will require a deposit of at least 20%
Deposit must be less than the property value
Enter the anticipated monthly rent here
Enter the mortgage rate, 5.5% is a typical rate currently but this can vary
Enter the mortgage term, 25 years is the average but lenders can offer shorter and longer terms

Loan to Value ratio (LTV):

Most lenders won't offer buy-to-let mortgages over a LTV of 80%.

Interest Cover Ratio (ICR):

Most lenders require rental income to be at least 125%-145% of the interest repayments for a buy-to-let mortgage.

Get started with a specialist buy-to-let broker to find out how much they could help you save on your monthly mortgage repayments.

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Do you have to stay with your current mortgage provider?

No, you don’t. As with all remortgages, it’s worth looking into the deals on offer from your current lender. However, you shouldn’t accept one straightaway. Your broker will shop around and see what buy-to-let deals other lenders are offering, otherwise, you could end up overpaying. Some lenders specialise in buy-to-let, so you could get a better deal elsewhere.

Just remember, if you exit your current deal before the end of the mortgage term, you may have to pay early repayment fees, which can run into thousands of pounds. So you need to weigh up whether or not it’s worth switching early.

An experienced broker is best placed to help you with this. They can review your circumstances and advise you on the right course of action.

What’s involved?

Before a lender agrees to switch your mortgage, they’ll carry out an in-depth affordability assessment to make sure you’re a reliable borrower and that you’ll be able to afford your buy-to-let mortgage. This will be different to the affordability checks carried out when you applied for your residential mortgage as they’ll be based on projected rental income rather than purely on your earnings.

Most lenders require your future rental income to be at least 125% of the mortgage payments before they’d be willing to let you switch to buy-to-let. This isn’t an exact science though as every lender has their own way of doing the calculations, you’re best speaking with one of the buy-to-let experts we work with on this.

Your lender will also carry out a thorough eligibility assessment (see below for more details).

Kevin's Story

Our broker got in touch really quickly

Our broker got in touch really quickly. They understood the situation and what we needed to get both mortgages over the line, and kept me up to date with the options available. They quickly set up a deal with another lender for the buy to let and that went through easily, meaning we didn’t lose any time or sleep in the process!

Read the full story

How to switch to a buy-to-let mortgage

If you want to make sure you’re getting the best possible deal, get in touch and we’ll match you with a specialist buy-to-let broker. Your broker will be able to guide you through each stage of the application, including:

  • Forecasting your rental income. This is key to securing a buy-to-let mortgage as it shows lenders you’re able to cover the repayments. If your projections don’t meet the eligibility criteria, your broker may be able to suggest ways to leverage other assets or income.
  • Looking at the best options. This might be speaking to your existing lender in the first instance about a consent to let or an internal switch, but will likely include shopping around specialist buy-to-let lenders to get the best rates and terms for you.
  • Preparing your application. The paperwork involved in a mortgage switch can feel overwhelming, but your broker will be on hand to help you fill out the forms and gather the right documentation so that your application can be processed as quickly as possible.

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Which lenders allow you to switch from residential to buy to let?

The vast majority of lenders will consider your application to switch but whether they’ll accept your request or not will depend on their specific eligibility criteria.

It’s important to remember that just because you qualified for a residential mortgage with your lender doesn’t guarantee you’ll be accepted for a buy-to-let mortgage.

Lenders tend to consider buy-to-let mortgages higher risk because of income shortfalls that can occur if you have trouble renting out your property or if your tenants fail to pay their rent. Therefore their eligibility assessments can be tougher.

Eligibility criteria

Each lender will have its own set of eligibility requirements. However, in general, this is what lenders will be looking at…

Loan-to-value ratio

The term loan-to-value ratio or LTV is normally used in reference to deposits when you’re buying a house, but when you’re switching mortgages the deposit will be the equity in your home. This can be a stumbling block when you’re switching from a residential to a buy-to-let mortgage as some people have LTVs as high as 95% when buying a home to live in, but the typical maximum LTV for a buy-to-let is 75%. This means you’ll need at least 25% of the current value of your home as equity to be eligible to switch.

Projected rental income

Affordability assessments for buy-to-let mortgages are based on the amount of income you can earn in rent rather than your own income. Most lenders look for projected rental income of somewhere between 125% and 145% as proof that you can afford the mortgage repayments.

How long you’ve owned your property

You’ll struggle to switch to a buy-to-let mortgage if you’ve had the residential mortgage on your property for less than six months.

Where you plan to live next

If you plan to rent out your property and move into rented accommodation, this could be a red flag for some lenders. This is because buy-to-let mortgages are typically only given to people who have at least one residential mortgage.

Also, rental payments can be higher than mortgage payments, so lenders may be concerned there’s a chance you wouldn’t be able to meet your buy-to-let repayments, especially if your tenant was late paying their rent.

Your experience as a landlord

Not all lenders will require landlord experience but they’ll view you as lower risk – and perhaps offer your more competitive rates – if you’ve rented out properties in the past.

Your credit history

You won’t necessarily have your application rejected if you have marks on your credit report. However, having a good track record of paying back loans could improve your chances and open you up to more competitive deals. Having said that, buy-to-let mortgages are still available to borrowers with bad credit.

Head to our credit reports hub to find out how to check your credit history for free.

Can you use a let-to-buy agreement to switch?

Potentially. This is when you switch the mortgage on an existing property to a buy-to-let mortgage, while at the same time releasing equity that you can put towards a deposit to buy a new home.

With a let-to-buy arrangement, you have two mortgages: a buy-to-let mortgage on your initial property and a standard residential mortgage on your new property.

This is a popular option for people who are switching to buy-to-let and hoping to take out a new mortgage on another residential property.

How Online Mortgage Advisor can help you find the right broker

Switching to a buy-to-let mortgage isn’t always a straightforward process and if you choose the wrong deal, it could end up costing you a lot of money.

That’s why you should always seek advice from an experienced mortgage broker, specifically one who specialises in helping people switch from residential to buy-to-let.

Our broker-matching service can connect you with an expert who will be able to review your situation and advise you on the best course of action for your circumstances.

Give us a call on 0808 189 2301 or simply make an enquiry and we’ll do the rest.

Maximise your chance of mortgage approval with a specialist in buy-to-let mortgages

Get Started

Ask us a question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in Buy to Let Mortgages

Ask us a question and we'll get the best expert to help.

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If you rent out your property without obtaining consent from your lender or switching to a buy-to-let mortgage, you’ll be in breach of the contract between yourself and the lender and you could be forced to repay your mortgage straightaway in full.

You may also find obtaining finance in the future more difficult.

No, you can only rent it out to tenants. Living in it would be in breach of your contract and could result in the lender calling in the entire debt. If you plan to live in the property and only rent out a part of it then talk to your lender about whether a consent to let might be more appropriate.

Yes, this is recommended. Standard home insurance will not cover you against the risks associated with letting a property to residential tenants. There are specialist landlord insurance policies available for these scenarios and your broker can advise you on which one to choose.

Most lenders won’t consider giving consent to let until you’ve had your mortgage and been living in your house for at least six months. Immediately buying a home and then wanting to change your mortgage will raise flags with your lender unless you have a very good reason.

You’ll need to go directly to your lender to apply for consent to let. Some lenders will have the option to do this online or via a banking app. If the process goes smoothly, it can happen in as little as two weeks.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

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Pete Mugleston

Mortgage Advisor, MD

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