Changing From a Buy-to-Let to a Residential Mortgage

Exploring a switch from a buy-to-let (BTL) to a residential mortgage? Rely on our expert advice to make the transition effortlessly

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Home Buy To Let Mortgages Changing From A Buy-to-Let To A Residential Mortgage
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Jon Nixon

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

If you’re looking to change from a buy-to-let (BTL) to a residential mortgage, there are some important things you should know about the switching process.

This guide covers everything you need to understand about how to switch and change your mortgage. You’ll learn how to convert from buy-to-let to residential, the lenders who can help, and where to find expert support for a smoother transition.

Keep reading for all the details or click on a link below to jump straight to a section…

Can you change from a buy-to-let mortgage to residential?

Yes, this is definitely possible. It’s a relatively common scenario because there are plenty of situations where switching from a buy-to-let to a residential mortgage makes sense.

Here are some of the most frequent circumstances where you might want to make a change:

  • You decide you want to live in your BTL property.
  • You’ve been working abroad or travelling and now want to return home, requiring somewhere to live
  • Your children or other family members want to move into the house.
  • After a separation, it might make sense for one of you to leave the family home and move into the BTL property temporarily.
  • If your BTL is located in a convenient location, you may want to start living there to be close to work or other amenities.
  • It might be a good option if you’re looking to downsize.

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How to change from a buy-to-let mortgage to residential

The simplest way to switch involves remortgaging with your existing lender. However, not every lender will be willing to let you change from buy-to-let to residential, which means you may need to explore alternative options. If that’s the case then the smart move is to speak with a mortgage broker who has experience arranging switches of this nature.

Using our free broker-matching service you can speak straight away to the right mortgage broker by simply making an enquiry online. They’ll be able to help with:

  • Downloading all your credit reports  – a strong credit history will definitely count in your favour when switching mortgages
  • Finding the right lenders who have a track record assisting people switch from a buy-to-let to a residential mortgage
  • Gathering all the necessary documents required to give your application the best chance of success, first time!

What happens if you don’t switch over mortgages?

If you move into your buy-to-let property without first informing your current lender and changing to a residential mortgage, this can cause you problems. If you don’t let them know of your plans, it can be considered a breach of contract. This may cause some lenders to demand you repay your mortgage in full, immediately.

If you’re ever unsure of what steps to take, getting some guidance from a skilled advisor can be invaluable. It will prevent any nasty surprises or costly missteps.

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How a broker can help change a mortgage

If you’re considering switching mortgages, it’s well worth discussing your plans with an expert broker first. They’ll be able to advise you on whether it’s worth remortgaging with your current lender, or if there are some more competitive options out there.

The brokers we work with have plenty of experience organising switches from buy-to-let to residential mortgages. This means they’ll be able to introduce you to the right lenders from day one and help you secure the best deal. Just make an enquiry and we’ll set up a free, no obligation chat today.

Eligibility and affordability requirements

When you change from a buy-to-let to a residential mortgage, there can be some key differences in the eligibility criteria and affordability calculations that are worth being aware of:

Affordability:
Whereas BTL affordability is largely based on the viability of the investment based on rental income, a residential mortgage is treated differently. Your income and expenditure will be looked at to see if you can afford the repayments on the mortgage.

Your income:
If your income comes from multiple sources, or if you’re self-employed, it’s well worth getting your broker to introduce you to a lender who’s willing to provide favourable terms. This could mean taking into account all of your bonus, commissions, overtime, or perhaps any additional freelance work you do.

Deposit and loan-to-value:
If you deal with the right lenders, you should be able to use a smaller deposit, meaning a higher loan-to-value (LTV) ratio than for your BTL property. This is because buy-to-lets are deemed a higher risk and a switch to a residential mortgage should lower this perceived risk. But, not all lenders will view it this way.

Credit history:
This can play a bigger role with a residential mortgage. It’s worth making sure your credit is in good shape before approaching lenders. But, if you do have bad credit, a specialist broker will still be able to introduce you to the lenders willing to discuss mortgage switching options.

Proof of address:
If you’ve been living elsewhere or travelling abroad, some lenders will want to see proof of address for your most recent home. A few lenders will also prefer if you’ve had a bank account or an active credit history in the UK during time spent away. Most lenders will also want to see proof that you plan on living in the BTL property.

Type of property:
If your BTL property has distinct features or is a ‘non-standard construction’ it may be more complex to switch. If this is the case, advice from a specialist broker is well worth it. Because, they’ll find you a lender who can provide the simplest way to move forward, and offer the best rates for your specific property.

Raising equity when you switch to a residential mortgage

It can be possible to raise additional money on the property when you change from a buy-to-let mortgage. You may want to do this to make some home improvements, consolidate debt, or build an extension.

Providing you own some equity in the investment property, with certain lenders, you can switch to a higher LTV for a residential mortgage. This can allow you to release equity and access money tied up in the property.

Lenders who allow you to change from buy-to-let to residential

The exact choice of lenders who can help facilitate a switch will depend on your specific property and current circumstances. But, to give you an idea of some of the available options, here are a few lenders who are open to discussing a change:

  • Natwest
  • TSB
  • Barclays

Keep in mind, there are thousands of potential lenders out there. So, to make sure you see the full range of possibilities, you should get an experienced broker to walk you through all the options based on your individual situation.

Speak with a broker experienced in buy-to-let and residential mortgages

If you want to get the best possible deal when switching from a buy-to-let to a residential mortgage, advice from a skilled broker is essential.

The brokers we work with are specialists in this area, which means they can ensure a smooth process as you change or remortgage onto a great deal.Just call 0808 189 2301 or make an enquiry. We’ll introduce you to an experienced broker for free.

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FAQs

Your lender may request that you pay off your remaining mortgage immediately, in full. If you’re unable to pay, they could repossess the property. So, make sure your mortgage is set up properly and seek professional advice if you’re ever unsure.

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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!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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