How do HMOs compare with standard buy-to-let properties?

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    “We know that time is precious for you, we can work around your availability while searching for the most competitive mortgage products and overseeing your mortgage application from start to finish”.

    Jonathan Smith – (CeMAP, BA Hons, Aff SWW, CeRER)

    You may wish to buy a property as your new home without selling your existing one. This could be because you’re temporarily moving to a new area and plan to move back at a later date or maybe you’ve been stuck in a property chain and simply haven’t been able to sell it. Whatever the reason, a let-to-buy mortgage offers a solution whereby you can let your existing home to tenants and buy a new home to live in.

    A let-to-buy mortgage can be complicated and some lenders only offer this option via mortgage brokers. At Trinity Finance, we work closely with lenders that handle let-to-buy mortgages and can search for the best arrangement for you. When you are ready to proceed, we oversee the entire let-to-buy process on your behalf to ensure a seamless transaction for each property.

    What is a let-to-buy mortgage?

    A let-to-buy mortgage is actually an arrangement consisting of two mortgages rather than being a single mortgage product. You need to remortgage your existing home to a buy-to-let mortgage and take out a residential mortgage on the new property.

    The remortgage aspect

    To be able to rent out your existing home, you need to switch your current residential mortgage to a buy-to-let mortgage. This is because renting out your home will breach the terms of your residential mortgage. A buy-to-let mortgage, however, is specifically designed to allow you to let your property to tenants. The rental income you achieve should be sufficient enough to cover your buy-to-let mortgage repayments. Hopefully, you will have built up some equity in your property so this is a good time to release some of it to use as a deposit for your new home. 

    Your new residential mortgage

    For your new home, you need a standard residential mortgage, which is much more straightforward. Our mortgage brokers, located throughout Kent, London and Edinburgh, are on hand to discuss the different types of residential mortgages available and can search for the best deal to suit your circumstances. You need to pass the lender’s usual affordability checks although the lender will check that your ability to repay the mortgage isn’t affected by the buy-to-let repayments. As the rental income should cover these, this shouldn’t be an issue.  

    Give us a call on 01322 907 000 to discuss let-to-buy mortgages in more detail. As they entail two mortgage processes, they can be complicated but our qualified mortgage brokers are highly experienced in handling this type of arrangement. We deal with the nitty-gritty of both aspects so that you don’t have to, ensuring your let-to-buy mortgage process is straightforward and stress-free. If it’s out of office hours, send an email to us at or an enquiry via our contact form and we will reply to you as soon as possible with more information.

    Become a landlord with a large buy-to-let mortgage loan - Trinity Finance
    Can you get a buy-to-let mortgage as a first-time buyer?

    Why use a let-to-buy arrangement?

    There are various reasons why this arrangement can be beneficial:

    • You may have found a property to buy as your new home but have been unable to sell your existing one.
    • You may be relocating elsewhere for a few years but intend to move back into your home afterwards.
    • You may wish to buy a new home with your partner and keep your existing one as an investment.
    • Your property’s value may have decreased since you purchased it. If you sell it, you stand to make a loss but if you rent it out, the value may eventually go back up.

    The criteria for a let-to-buy mortgage

    The buy-to-let remortgage

    Lenders have their own criteria for let-to-buy mortgages but you can generally expect to be offered a maximum loan-to-value (LTV) ratio of 75% for the buy-to-let side of the equation. This means you need to have a deposit of 25%. Assuming you have sufficient equity in your property, you can use some of it to cover this deposit and use the remaining equity as a deposit for your new home.

    For example, if your property has a value of £200,000 and you owe £100,000 for your current mortgage, you have £100,000 in equity. A lender may offer you a 75% LTV buy-to-let mortgage at £150,000. You can use £50,000 of your equity to cover the 25% deposit. The remaining £50,000 equity can be used as a deposit for your new property.

    Lenders expect a minimum rental cover for buy-to-let mortgages, which is typically 145%. This means the amount you receive in rent each month must at least cover that specified percentage to ensure your mortgage repayments are met.

    With a let-to-buy mortgage, one of the stipulations is that your current property cannot be advertised for sale. You also need to provide the lender with proof that you’re buying your new home at the same time.

    The residential mortgage

    For your new residential mortgage, you usually need at least a 10% deposit although some lenders may insist on a lower LTV so you’ll need to raise a higher amount. Regardless of their requirements, the more deposit you can pay, the more deals with better rates will become available. The lender will carry out the normal affordability checks based on your income, expenditure and credit rating. Although they will consider your buy-to-let repayments when calculating the affordability, the proof of rental cover should satisfy their requirements.

    General requirements

    Another condition set by lenders can include a maximum age of 70 or 75 years at the time of application. Also, whilst a good credit rating is preferred as you need to meet the requirements for two mortgage applications, some specialist lenders can help you with a let-to-buy mortgage if you have an adverse credit rating. If this applies to you, speak with one of our mortgage specialists for advice on how to improve your credit rating before you proceed with a let-to-buy arrangement. When you’re ready to go ahead, your dedicated mortgage consultant will approach a specialist lender to ensure your chances of a successful application.

    Your stamp duty liability

    As you are buying a second property, you will be liable for a 3% surcharge on top of the normal stamp duty rate. This can cost you thousands so it’s important to budget for it before you proceed. If you sell your original home within 3 years of buying your new one, however, you can claim this additional stamp duty cost back from HMRC.

    The pros and cons of let-to-buy mortgages

    There are advantages and disadvantages to consider before proceeding with a let-to-buy arrangement.


    • It removes the pressure of having to sell your existing home when you need to move into your new one quickly.
    • You can move back into the property at a later date if you’ve had to move away temporarily.
    • If your property has decreased in value, it prevents you from making a loss by selling it and allows for the value to increase again in the future. 
    • Owning two properties lets you benefit from an increase in value for both if the market is favourable.


    • You are liable for two mortgages.
    • Let-to-buy rates are usually higher than those for standard residential mortgages as they are considered to be a higher risk.
    • There are extra fees to pay for both properties, such as the mortgage arrangement fees and your solicitor’s costs.
    • You have to pay a 3% stamp duty surcharge for the new property.
    • You may have periods without any tenants in your original property.
    • You have to take on the responsibilities of being a landlord, such as finding tenants, handling maintenance issues and paying the tax due on your rental income.
    • If the market turns and property prices fall in the future, you stand to lose on the values of both properties.

    Alternatives to consider

    There are other options to think about, which may be more beneficial to you than a let-to-buy arrangement.

    Obtain consent to let

    If you only need to rent your home out for a short period instead of as a long-term investment, your lender may approve a consent to let agreement. This is applied to your existing residential mortgage and allows you to let the property for a short term while you buy your new home or move into rented accommodation. Not all lenders offer this arrangement while others do but can charge you a higher fee or rate. Due to it being a short-term arrangement, it can be difficult to be approved for a second residential mortgage on the new property.

    Stay in your current home

    If you’re having difficulty selling your home and are in no hurry to move, it may be worth staying where you are. You can always consider releasing some of the equity tied up in your property to carry out home improvements. Not only will this make your home more comfortable for you to live in but it should increase its value. Should you decide to sell it in the future, these improvements will make your property more attractive to potential buyers.

    If, on the other hand, your property has decreased in value, consider staying where you are so that you don’t make a loss when selling it. When the market improves and the value increases, then it will be worth putting your property up for sale.

    Switch to a buy-to-let mortgage

    Instead of buying a new home while keeping your current one, you could simply move into rented accommodation and switch your existing residential mortgage to a buy-to-let mortgage. That way, you can keep your property as a rental investment without having to take on another mortgage for a new property.

    Take out a second charge mortgage

    This allows you to borrow money via a second mortgage that’s secured against your home. It’s an ideal solution if you have equity in your property and don’t want to remortgage. This arrangement adds another mortgage on top of your existing one so that you are responsible for making repayments for two mortgages. It can save you having to pay early repayment charges or sacrificing a good deal you already have if you remortgage. You can then use this secured loan to invest in a second property. 

    Benefit from a smooth and stress-free let-to-buy mortgage process

    Let-to-buy mortgages relate to a niche market so it’s important to speak with one of our mortgage specialists when you’re considering this arrangement. Many lenders only deal with brokers regarding let-to-buy solutions and, at Trinity Finance, we have formed good relationships with those that do. 

    Our expert brokers can discuss your situation and advise you on all of the options available, guiding you on the best route to take for your circumstances. When you’re ready to proceed with a let-to-buy mortgage, our specialist brokers – located throughout Kent, London and Edinburgh – can search for the best buy-to-let and residential mortgage deals available. As the process involves dealing with two mortgages simultaneously, it can be complicated but your dedicated mortgage broker will help you throughout and look after every aspect of the arrangement from start to finish. This ensures you benefit from a straightforward and stress-free experience.

    To begin your let-to-buy mortgage process, simply give us a call on 01322 907 000 or send us an email at If you prefer, send your information to us via our contact form and one of our mortgage consultants will reply to you as quickly as possible.

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