If you’re thinking about renting out your home in Beverley, you may need to switch from a residential mortgage to a buy to let. This is common if you’re moving elsewhere, investing in property, or looking for extra income.
How to Change your Mortgage to Buy to Let
To switch to a buy to let mortgage in Beverley, you must speak to your lender. Some may offer consent to let, which allows you to rent out your home temporarily while keeping your current mortgage. This is usually for a set period, and you may face additional fees or higher interest rates.
If you need a long-term solution, remortgaging to a buy to let product is the best option. Lenders will check your financial situation and expected rental income. If your current lender does not offer buy to let mortgages or has strict requirements, moving to a different provider may give you better terms.
Buy to let mortgages often have higher interest rates than residential mortgages, and lenders typically require a larger deposit. It’s important to compare options to find the most suitable deal.
What Criteria Do I Need to Meet to Change My Mortgage to Buy to Let?
Lenders assess several factors before approving a switch to a buy to let mortgage. One key requirement is that the expected rental income must exceed the mortgage payments, usually by at least 125% to 145%, depending on the lender’s criteria. This ensures the rental income covers the mortgage, even if interest rates rise.
Most lenders also require a minimum personal income, typically around £25,000 per year, to ensure you can manage any financial shortfalls. They will also check your credit history, existing mortgage balance, and overall affordability.
Equity in the property is another factor. Many lenders require at least 25% equity or a 25% deposit if you are remortgaging. The more equity you have, the better the mortgage deals available.
Can I Live in My Buy to Let Property?
A buy to let mortgage in Beverley is designed for rental properties. If you take out this type of mortgage, you cannot live in the home yourself. Lenders set this rule because buy to let mortgages follow different risk assessments and affordability checks.
If your circumstances change and you need to move back into the property, you must switch to a residential mortgage. Continuing to live in a property with a buy to let mortgage without informing the lender could break your mortgage terms.
If you’re unsure about your future plans, a consent to let agreement might be a better option. This allows you to rent out your home for a short period without committing to a full buy to let mortgage.
How Many Buy to Let Mortgages Can I Have?
There is no strict limit on how many buy to let mortgages you can hold, but lenders will assess your overall financial position. If you own multiple rental properties, some lenders may view you as a portfolio landlord, which means different lending criteria may apply.
Lenders consider factors such as rental income, outstanding mortgages, and your ability to manage multiple properties. Some offer specialist buy to let products for landlords with multiple properties, which may have different affordability checks.
If you’re considering changing your mortgage to buy to let in Beverley, finding the right lender and mortgage deal is key. Our mortgage advisors in Beverley can help you explore your options, ensuring you meet lender requirements and secure the best possible terms.
Date Last Edited: February 11, 2025
