The best way to explain a Let to Buy mortgage is using an example case.
Mr & Mrs Smith are living in a property that they currently own, with a mortgage. They would like to buy a new property to be their home and to rent out their current property to tenants. Their residential mortgage would no longer be appropriate, so they would need to remortgage their home as a rental property, using what is called a Let to Buy mortgage.
This funds from this Let to Buy remortgage could be used as a deposit to purchase their new home and (if needed) a new residential mortgage would be taken out to complete the purchase, secured on their new home.
The main difference between Let to Buy and Buy to Let remortgages is that with the former the property that the mortgage is secured on was the client’s residential home that they lived in; a Buy to Let remortgage is when a client wishes to refinance a rental property they already own.
