In short

You’ve found your dream home, but yours still hasn’t sold. Let-to-buy helps you use the equity in your existing home to remortage it and release cash for a deposit on the dream home. You then rent out your current home and use the income to pay the mortgage while you get a new mortgage for your new place. You’ll then have two mortgages with the same lender.

The pros

  • When your property chain is under pressure, let-to-buy can be a quick fix to keep your new home secured.
  • It’s great for people with two properties who want to move in together, but don’t want/can’t sell one or either of them.
  • If property prices rise, you could enjoy two nice profits.

The cons

  • Two mortgages means your commitment is doubled and if property prices fall, you’ll suffer twice.
  • You’ll pay a stamp duty surcharge of 3% for your second home, but, if you sell your current home within 36 months, you’ll get that payment back from HMRC.
  • Let-to-buy mortgage rates are usually higher.

Typical lending criteria

  • A minimum LTV (loan to value) of 75%.
  • A maximum age of 70 when you apply.
  • Proof of your prospective purchase.

Next steps

 If let-to-buy sounds like an option for you, your first steps should be to talk to a mortgage broker (many let-to-buy lenders will only deal with a broker) and at least three letting agents to get a realistic figure of how much rental you could achieve on your current home.

Then you’ll need to find your dream home. North Stoneham Park is a perfect location if you’re looking for a sound investment with great build quality. Take a look at the Park’s homes pages to find a home that matches your needs – the two-bedroom Radley at Homewood Park is an affordable, spacious and stylish house that’s proving very popular with buyers. The Radley on Plot 163 is our Featured Home and comes with a number of exciting incentives and a sale price of £307,000.

For more information, contact the Park’s recommended financial advisors, Mortgage Advice Bureau, on 01252 710000.