Let To Buy Mortgages
A let to buy mortgage allow a homeowner to let their existing home and buy another home elsewhere.

Assessment

• Rental income: the lender will normally require that the achievable rental income of the existing property is well above (30%-50%) the mortgage repayments on your existing property.
• Disposable income: the lender will look at your disposable income to assess how much they will lend you on your new residence.
• Borrowing amount: as long as the likely rental income on your existing property will pay your old mortgage with enough to spare, some enders will offer you a mortgage for the new property based on the their normal income multiples.
  Others base the amount that they will lend on your salary and the existing loan commitments that you have, but then apply the 'deduction rule'. This means that they will lend up to 3.5 times your income (or whatever salary multiple applies), minus a representative figure for annual mortgage payments worked out at a pre-set level of interest. Confused?
  Say you earn £40,000 and have an outstanding mortgage balance on your property of £120,000. Under the rule, the annual mortgage repayments may be calculated as £10,000. This would be deducted from your salary to leave £30,000, which is then multiplied by 3.5 to give £105,000 - the amount that you are able to borrow.
• Loan to value: most lenders will also set a fairly rigid and fairly demanding loan-to-value requirement on the amount to be borrowed, depending on the size of the sum you are asking for. Don't be surprised if you are required to stump up a 15 or 20 percent deposit, though you may be able to get away with 10 percent or even less on a smaller loan.