Let to Buy: Keep Your Home and Buy Another

Last updated: 19 October 2026

What Is a Let-to-Buy Mortgage?

A let-to-buy mortgage allows you to rent out your current home and use the equity in it to help fund the purchase of a new property to live in. Instead of selling your existing home and losing a potential investment, you keep it as a buy-to-let property while moving into a new one.

In practice, let to buy involves two separate mortgages running at the same time. Your current residential mortgage is switched to a buy-to-let product, and you take out a brand new residential mortgage on the property you are buying. The rental income from your old home helps cover the buy-to-let mortgage repayments, while equity released during the remortgage can contribute towards your deposit on the new property.

Why do homeowners choose let to buy?

There are several reasons this route appeals to UK homeowners. Perhaps the most common scenario is when someone needs to move but their property is proving difficult to sell. Rather than reducing the price or waiting months for a buyer, they can let the property and move on with their plans. Couples who each own a home and want to live together often use let to buy as well, keeping one property as an investment rather than selling both. Other homeowners simply see long-term value in holding onto their property, particularly in areas where house prices are rising steadily. In all these cases, let to buy offers a way to move without giving up an asset.

How Does Let to Buy Work?

Let to buy follows a structured process that involves remortgaging your existing property and applying for a new residential mortgage at the same time. Your broker will typically coordinate both applications together to keep the timelines aligned.

Step 1: Assess the equity in your current home

Start by working out how much equity you have. If your home is worth £300,000 and your outstanding mortgage is £180,000, you have £120,000 in equity. Most buy-to-let lenders will lend up to 75% of the property value, which in this example would be £225,000. After repaying the existing £180,000 mortgage, that leaves £45,000 of released equity to put towards your deposit on the new home.

Step 2: Get a rental valuation

Before a buy-to-let lender will approve the switch, they need to know the property will generate enough rent. Get valuations from at least two or three local letting agents. The rent must typically cover 125% to 145% of the buy-to-let mortgage payment, depending on the lender and whether you are a basic-rate or higher-rate taxpayer.

Step 3: Apply for both mortgages

Your broker submits the buy-to-let remortgage application on your existing home and the residential mortgage application on the new property. These two applications run in parallel, though they rarely complete at exactly the same time. Some lenders prefer to see one approval in place before progressing the other, so working with a broker who understands the sequencing is important.

Step 4: Factor in stamp duty and costs

Because you will own two properties at the point of purchase, the new home attracts the higher rate of stamp duty land tax. Since 31 October 2024, the surcharge on additional properties in England and Northern Ireland has been 5%, up from the previous 3%. However, if you sell your original home within 36 months of buying the new one, you can apply to HMRC for a refund of the surcharge.

Step 5: Complete and let the property

Once both mortgages are in place, you complete on the new purchase, move in, and begin letting your old home. You will need to arrange landlord insurance, gas safety certificates, an energy performance certificate (EPC) and comply with all relevant landlord regulations. If the property is an HMO or falls within a selective licensing area, additional licensing may be required.

How Much Deposit Do I Need?

You effectively need equity and deposit across two properties. On your existing home, most buy-to-let lenders require at least 25% equity after the remortgage, giving a maximum loan-to-value (LTV) of 75%. For the new home, you will need a residential mortgage deposit of at least 10% to 15%, though a larger deposit secures better interest rates.

A worked example

Consider a homeowner whose current property is worth £350,000 with a £200,000 mortgage balance:

Element	Amount
Current property value	£350,000
Existing mortgage balance	£200,000
Maximum buy-to-let loan at 75% LTV	£262,500
Equity released after repaying existing mortgage	£62,500
New property purchase price	£400,000
Residential deposit needed (10%)	£40,000
Remaining equity after deposit	£22,500

In this scenario, the released equity of £62,500 comfortably covers the £40,000 deposit on the new home, with £22,500 left to cover stamp duty, legal fees and moving costs. If your equity is tighter, a broker can explore lenders offering higher LTV on the buy-to-let side or identify products with lower deposit requirements on the residential mortgage.

What About Stamp Duty on a Let-to-Buy Purchase?

Since you will own two properties at the point of buying your new home, you will pay the higher rate of stamp duty land tax (SDLT). Since 31 October 2024, the surcharge on additional properties in England and Northern Ireland stands at 5%, added on top of the standard SDLT bands. This replaced the previous 3% surcharge and represents a significant increase in upfront costs.

How much extra will you pay?

New home price	Standard SDLT	With 5% surcharge	Extra cost
£250,000	£2,500	£15,000	£12,500
£350,000	£7,500	£25,000	£17,500
£500,000	£17,500	£42,500	£25,000

Can I get the surcharge refunded?

Yes. If you sell your original home (the one you are letting out) within 36 months of completing on the new purchase, you can apply to HMRC for a refund of the 5% surcharge. This makes let to buy a viable short-term strategy for homeowners who intend to sell eventually but need time to find the right buyer. However, you must apply for the refund within 12 months of the sale, or within 12 months of the filing date for the SDLT return on the new purchase, whichever is later.

What Do Lenders Look for?

Because let to buy involves two simultaneous mortgages, lenders assess your application more carefully than a straightforward purchase or remortgage. Both the buy-to-let lender and the residential lender need to be satisfied independently before you can proceed.

Buy-to-let mortgage on your existing home

The lender converting your residential mortgage to buy-to-let will check:

• Equity: At least 25% of the property value, giving a maximum LTV of 75%. Some lenders require up to 40% equity for certain property types or borrower profiles.
• Rental coverage: The expected rent must cover 125% to 145% of the monthly mortgage payment. Higher-rate taxpayers are often stress-tested at the higher end of this range.
• Property suitability: The home must be suitable for letting. Lenders may decline properties with structural issues, short leases (for flats) or restrictions in the title deeds that prevent letting.

Residential mortgage on your new home

The residential lender will assess:

• Income and affordability: Standard affordability checks apply. The lender will factor in both your income and your existing buy-to-let commitments. Some lenders use “top-slicing,” which means they consider surplus rental income as part of your overall affordability.
• Deposit: A minimum of 10% to 15% for the new property. The deposit can come from equity released from your existing home, savings, or a combination.
• Credit history: A clean credit file is preferred, though specialist lenders may accept minor adverse credit with a larger deposit.

General eligibility

Most let-to-buy lenders require applicants to be aged between 25 and 75, with a minimum personal income of £15,000 to £25,000 per year. You will also need to demonstrate that you have an onward purchase in progress. Lenders want to see that the existing property is genuinely being retained as a rental, not simply unsold.

Consent to Let vs Let-to-Buy Remortgage

If you are not ready to commit to a full let-to-buy arrangement, your existing lender may offer a simpler alternative called “consent to let.” This is temporary permission to rent out your property while keeping your current residential mortgage in place, without switching to a buy-to-let product.

When consent to let works

Consent to let is typically granted for 12 months, sometimes longer. It suits homeowners who need to let their property for a short period, perhaps while working away or testing the rental market before committing to a permanent switch. Your lender is not obliged to grant consent, and some charge a fee or apply a higher interest rate during the consent period. Importantly, consent to let does not release any equity, so it will not help with a deposit on a new property.

When a full remortgage is better

A let-to-buy remortgage is the right choice when you plan to let your property long-term and need to release equity for your next purchase. It gives you access to proper buy-to-let rates, the ability to release cash, and the security of a product designed for landlords. The downside is the cost of remortgaging (valuation fees, legal fees, possible early repayment charges on your existing deal) and the commitment to managing a rental property.

Feature	Consent to let	Let-to-buy remortgage
Duration	Usually up to 12 months	Long-term, no time limit
Equity release	No	Yes, up to 75% LTV
Interest rate	Existing rate (may increase)	Buy-to-let rate applies
Setup costs	Low (admin fee only)	Higher (valuation, legal, arrangement fees)
Best for	Short-term or temporary letting	Long-term letting with equity release

Can I Use a Limited Company for Let to Buy?

Transferring your existing home into a limited company as part of a let-to-buy arrangement is possible in theory, but it comes with significant costs and complications. The transfer is treated as a sale and purchase, triggering stamp duty, capital gains tax and potentially higher legal fees. For most homeowners, this makes it impractical.

When a limited company might make sense

If you are a higher-rate taxpayer and plan to build a larger property portfolio over time, purchasing the new home through a limited company (while keeping the let property in your personal name) could be worth exploring. However, the new residential purchase would need to be structured as a buy-to-let in the company, since residential mortgages are not available to limited companies. This changes the nature of the arrangement and requires careful tax planning with a qualified accountant.

For the vast majority of let-to-buy cases, keeping both properties in your personal name is the simplest and most cost-effective approach. The mortgage interest tax relief restriction that prompted many landlords to use limited companies does not affect you on the residential mortgage for your new home, only on the buy-to-let element.

What Are the Risks?

Let to buy is not without risk, and understanding the downsides before committing is essential. Carrying two mortgages simultaneously doubles your exposure to the property market and increases your monthly financial obligations.

Void periods

If your tenants leave and the property sits empty, you will need to cover the buy-to-let mortgage from your own pocket alongside your residential mortgage. Even in strong rental markets, void periods of one to two months between tenancies are common. Building a cash reserve of at least three months’ mortgage payments on the let property is sensible.

Falling property values

A decline in house prices affects both properties. If values fall significantly, you could find yourself in negative equity on one or both properties. This risk is particularly relevant for homeowners who stretched to maximise their borrowing on both mortgages.

Interest rate rises

When your buy-to-let fixed rate ends, the new rate could be higher. If the rental income no longer meets the lender’s coverage ratio, remortgaging becomes difficult. Similarly, your residential mortgage rate could rise at renewal. Stress-testing your finances against a 2% rate increase on both mortgages is a prudent step before proceeding.

Landlord responsibilities

Becoming a landlord brings legal obligations covering gas safety, electrical safety, fire regulations, deposit protection and tenancy management. If you do not want to manage the property yourself, a letting agent typically charges 8% to 15% of the monthly rent, which reduces your effective yield.

Tax implications

Rental income is taxable, and mortgage interest relief for individual landlords is now limited to a 20% tax credit. If you are a higher-rate taxpayer, this means your effective tax burden on rental profits is higher than it would be inside a limited company. Capital gains tax also applies when you eventually sell the let property, though you may qualify for partial private residence relief if the property was your main home before you let it. Speak with a property-specialist accountant to understand the full picture.

How UK Mortgage Finder Can Help

Let to buy is one of the more complex mortgage arrangements because it involves coordinating two separate applications with potentially different lenders. Getting the sequencing wrong can delay your purchase or leave you without the equity release you need for your deposit.

UK Mortgage Finder connects you with experienced brokers who specialise in let-to-buy arrangements. They can assess your equity position, identify the right buy-to-let product for your existing home, and find a competitive residential mortgage for your new property, all while ensuring the two applications work together smoothly.

Our service is completely free to use. You tell us about your situation, and we match you with a qualified, FCA-regulated adviser who will guide you through every step. Your broker will explain all costs and fees upfront before you commit to anything.

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