Switch of main residence to Buy-to-Let.

1.29% two-year fix rate.

£200,000 Buy-to-Let mortgage with 15-year term.

Main residence converted to Buy-to Let to enable purchase of second coastal property.

Our client

Our client, a professional woman, had always wanted to own a property by the sea. She was considering how best to achieve this as part of her retirement planning.

She had always wished to live by the coast and longed to buy a seaside property before she gave up work. Our client owned a main residence in London and had recently sold a second Buy-to-Let property.

What was needed?

The client had found the coastal property she wanted to buy at an agreed price of £650,000. However, the sale of her Buy-to-Let property had netted her only £500,000 after costs. However, she was not ready to sell her main residence.

The client wanted to find a way to borrow the £150,000 differential, plus enough money to cover Stamp duty and other costs; a total of £200,000.

What was the challenge?

In other circumstances a standard residential re-mortgage could have been arranged to fund the purchase of the coastal property. However, the client’s income was insufficient to make a £200,000 residential mortgage acceptable to a lender.

Another way had to be found for the client to borrow the money she needed. Otherwise her plans to buy her dream seaside property would be dashed.

How we provided the solution

Mike Brooker, Associate Director at Rose Capital Partners, assessed the situation and discussed the options with the client.

Mike recommended that the client raise the funds for her coastal purchase via a Buy-To Let mortgage on her main residence, rather than the coastal property, as a residential mortgage to this value was not an option at her income level. He secured the arrangement through a switch of main residence to Buy-to-Let lending.

This offered several benefits for the client.

She would be able to secure the lending needed to purchase the coastal property she had always dreamed of. And achieve this despite her income amount preventing her from obtaining a residential mortgage. In addition, as the seaside property would be mortgage free, if she did decide to sell her London property in the future, and potentially pay off the Buy-to Let mortgage, she could conceivably retire to the coast debt-free. However, if she decided to retain her London house when she retired fully to the coast, the mortgage term arranged was 15 years which would take her well into retirement. Something that would not have been possible with a residential mortgage.

The client was delighted that she could secure her dream coastal home for the future, while retaining her London home, and offering her options going forward.

What was the rate?

The 1.29% Buy-to-Let rate was fixed for 2 years on a £200,000 mortgage with a £1995 lender arrangement fee.