Why people do it
When it makes sense
Two applications at once makes this more complex than a straight move, which is exactly why it is worth having someone coordinate it.
- You want to keep your current home as a long-term investment
- You cannot sell in the timeframe you need, or the market has gone quiet
- You have built up equity you want to use rather than lose to fees
- You are moving for work and are not certain the move is permanent
The mechanics
How the two parts fit together
The existing property is refinanced based on the rent it could achieve rather than on your income, which frees up your income for the new residential mortgage. Both usually need to complete on the same day.
Buy-to-let mortgages are generally interest only and at higher rates than residential deals, so the payment on the property you are keeping may look different to what you are used to.
You also become a landlord, with everything that involves, from gas safety certificates to deposit protection to finding tenants.
Some let to buy mortgages are not regulated by the Financial Conduct Authority.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Taxation advice is not regulated by the Financial Conduct Authority.