Convert Residential Mortgage to Buy to Let | UK Guide

If you are considering moving to a new home but want to keep your current property, you are tapping into a savvy investment strategy used by many homeowners. Turning your primary residence into a rental property can provide a steady stream of rental income and allow you to retain a valuable asset. However, it is not as simple as finding a tenant and collecting rent.

Your existing residential mortgage was approved based on you living in the property. Renting it out without informing your lender is a serious breach of your mortgage agreement. To do this legally and securely, you must convert your mortgage to a financial product designed for landlords.

This comprehensive guide will walk you through the entire process. We will explain your two main options—securing a temporary ‘Consent to Let’ or remortgaging to a full buy to let mortgage—and detail the costs, criteria, and responsibilities involved in becoming a landlord.

Figures and thresholds in this guide (e.g., LTV, ICR, stress rates, fees, consent-to-let terms) are illustrative only. Lender criteria change and vary by provider. Always check your specific lender’s policy and get advice before acting. The article is updated as of Nov 12, 2025

Why Convert Your Residential Mortgage to a Buy To Let?

Homeowners choose to let out their property for a variety of personal and financial reasons. This move is often a strategic step on the housing ladder or a reaction to shifts in the housing market.

Common motivations include:

• Relocating Temporarily: You may be moving for a fixed-term work contract or travelling for an extended period and plan to return.
• Moving in With a Partner: You are starting a new chapter but want to keep your own property as a financial safety net or investment.
• A “Let to Buy” Scenario: You have found your next dream home but want to use the equity and rental potential of your current one to fund the purchase, effectively becoming a landlord and a homeowner simultaneously.
• Building an Investment Portfolio: You see the potential for long-term capital growth and want to make your first move into property investment.
• Changes in Circumstance: An inherited property might become your main residence, leaving your original home vacant and ready to generate rental income.

Whatever your reason, the goal is the same: to transform your home from a personal residence into a functioning, income-generating asset. This requires a formal change to your mortgage finance.

What Happens If You Let Out a Residential Property Without Consent

It cannot be overstated: renting out a property that has a residential mortgage without your lender’s explicit permission is a major violation of your loan terms. The consequences can be severe and long-lasting.

Every mortgage agreement for a residential property contains a clause stating that it must be your primary residence. Breaching this condition can be considered mortgage fraud.

If your lender discovers you are letting the property without authorisation, they can take immediate action, including:

• Demanding Full Repayment: The lender could demand you repay the entire outstanding mortgage loan immediately.
• Imposing Financial Penalties: You could face substantial one-off fees or be moved onto a much higher standard variable Interest Rate, significantly increasing your monthly mortgage payments.
• Damaging Your Credit History: A breach of contract will be recorded on your credit file, making it much harder to secure mortgages or other forms of credit in the future.
• Legal Action: In serious cases, lenders may pursue legal action or repossess the property.

The risks far outweigh any perceived benefits of avoiding the proper process. Fortunately, there are two clear, legitimate pathways to follow.

Option 1: Ask Your Lender for ‘Consent to Let’

If you only plan to rent out your property for a short, defined period (typically 6-12 months), your first step should be to contact your mortgage provider. You can ask them for a consent to let agreement. If you are interested, we can also hep you with mortgage advice.

This is a formal, temporary permission slip from your current provider that allows you to let your home without changing your underlying mortgage product. It is an ideal solution for temporary situations, like a short-term work secondment.

However, be aware of the following:

• Potential Fees and Rate Changes: Lenders often charge an administration fee for granting consent. They may also increase your interest rate for the duration of the letting period to reflect the higher perceived risk.
• Strict Time Limits: Consent to let is not a long-term solution. It is usually granted for a maximum of 12 months, after which you would be expected to move back in or remortgage.
• Possible Refusal: Your lender is not obligated to agree. They may refuse your request if you are in mortgage arrears, have insufficient equity in the property, or if the projected rental income doesn’t meet their criteria.

If your plans are long-term or your lender refuses consent, you will need to pursue a full remortgage. We can help you with remortgage advice, feel free to contact our team of specialist mortgage brokers in the uk.

Option 2: Remortgage to a Buy to Let Mortgage

For anyone planning to become a landlord for the foreseeable future, the correct and necessary step is to remortgage from a residential mortgage to a buy to let mortgage. This is a permanent switch to a different type of mortgage loan designed specifically for rental properties.

This is the required route if:

• You are moving out permanently and want to keep the property as a long-term investment.
• Your request for consent to let was denied or has expired.
• You are actively building a portfolio of rental properties.

Transitioning to buy to let mortgages involves a completely new application process with different eligibility criteria and costs.

How it works

The assessment for a buy to let mortgage is fundamentally different from a residential one. Lenders are primarily concerned with the property’s potential as an investment, not your personal affordability.

Key eligibility criteria include:

• Loan to Value (LTV) Ratio: Most lenders require a larger deposit or more equity for buy to let properties. You will typically need at least 25% equity, meaning a maximum LTV of 75%.
• Interest Coverage Ratio (ICR): This is the most critical calculation. Lenders will test if your projected monthly rental income can cover the mortgage payments by a certain margin (e.g., 125% or 145%) at a “stressed” interest rate. This ensures the investment is viable even if mortgage rates rise.
• Rental Yield: The lender will assess the property’s rental yield (annual rent as a percentage of property value) to ensure it’s a sound investment.
• Personal Income: While the focus is on rental income, some lenders still have minimum personal income requirements (often around £25,000 per year) to ensure you have a financial buffer.

A professional mortgage broker is invaluable here. They can assess your eligibility, use a mortgage rate finder to compare hundreds of mortgage products, and identify lenders whose criteria you meet.

Costs and responsibilities

Switching to a buy to let mortgage involves new costs and landlord responsibilities that you must budget for.

Upfront Costs:

• Arrangement Fees: These can be higher for buy to let mortgages and can sometimes be added to the loan.
• Valuation Fee: The lender will require a new valuation of the property to assess its current market value and rental potential.
• Legal Fees: You will need a solicitor to handle the legal work of remortgaging.
• Stamp Duty Land Tax (SDLT): This is a critical point. If you are buying a new home to live in while converting your old one to a rental, you will likely have to pay the higher rate of Stamp Duty (an extra 3% surcharge) on the new purchase as it will be classed as a second property.
• Early Redemption Fees: If you are leaving your current fixed rate deal early, you may face significant redemption fees.

Ongoing Responsibilities & Tax:

• Higher Interest Rates: Buy to let mortgage rates are typically higher than residential ones.
• Mortgage Payments: Many landlords opt for an interest only mortgage to maximise cash flow, but repayment options are also available.
• Landlord Insurance: Standard home insurance is not valid for rental properties. You must take out specialist Landlord insurance.
• Income Tax: The rental income you receive is taxable. You must declare it to HMRC via a self-assessment tax return.
• Capital Gains Tax (CGT): When you eventually sell the property, you may be liable to pay Capital Gains Tax on any profit you make from the increase in its value.

Next Steps

Navigating the transition from homeowner to landlord is complex. Attempting to let a property without the correct mortgage or lender approval is considered mortgage fraud and carries severe penalties. To ensure you make the right decisions, professional advice is essential.

An experienced mortgage broker will be your most valuable partner. They can:

• Review your current mortgage agreement and financial situation.
• Help you decide whether a temporary consent to let or a full buy to let remortgage is the best path.
• Scan the entire market to find the most competitive mortgage rates and mortgage products for your circumstances, whether it’s for a standard rental, an HMO property, or a holiday let.
• Manage the application process on your behalf, saving you time and stress.

Additionally, speaking with a tax advisor is highly recommended to understand your obligations regarding Income Tax and Capital Gains Tax. Once you’re ready, you can use property rental sites to advertise your property and find suitable tenants.

Frequently Asked Questions

Can I rent out my home if I still have a residential mortgage?

Only with explicit, written consent to let from your lender for a temporary period. For long-term renting, you must switch to a buy to let mortgage.

Do I need to switch to a buy to let mortgage to rent long term?

Yes, absolutely. A buy to let mortgage is legally required if you intend to let your property on an ongoing basis.

Will my interest rate change if I get consent to let?

It is very likely. Lenders may charge an administration fee and/or increase your Interest Rate for the duration of the consent period to reflect the different risk profile.

What is an Interest Coverage Ratio (ICR)?

ICR is a calculation lenders use to ensure the property’s rental income can comfortably cover the mortgage payments, typically by 125-145%, even at a higher “stress” interest rate.

Is a buy to let mortgage more expensive than a residential one?

Usually, yes. The interest rates and arrangement fees are often higher. You also need to factor in additional costs like Landlord insurance, maintenance, and taxes on your rental income.

Conclusion

Converting your residential mortgage to a buy to let is a crucial and mandatory step when you decide to rent out your home. While it might seem daunting, it opens the door to generating valuable rental income and holding a significant long-term investment.

Your two primary pathways are clear: a short-term consent to let agreement with your current provider for temporary situations, or a full remortgage to a dedicated buy to let mortgage for a permanent move to become a landlord. The latter involves a more rigorous application process, with lenders focusing on criteria like the Loan to Value and Interest Coverage Ratio.

Success as a landlord depends on careful financial planning. You must account for all upfront costs, including potential Stamp Duty surcharges and Legal Fees, as well as ongoing tax obligations like Income Tax and future Capital Gains Tax.

Given the complexities, seeking expert guidance is the wisest next step. A qualified mortgage broker can provide tailored advice, navigate the market to find the best mortgage rates, and ensure your transition from homeowner to landlord is smooth, compliant, and profitable.