How to switch your mortgage from buy-to-let to residential
If you want to live in your buy-to-let (BTL) property permanently, you will need to switch from a BTL mortgage to a residential mortgage before doing so.
Your first step should be to inform your existing BTL lender of these changes to your circumstances and see if you can come to some sort of arrangement.
How do I switch my mortgage?
If they can, you will be able to remortgage to a residential loan with them, which will be based on your personal income and creditworthiness.
But if your existing lender will not allow you to remortgage with them, you will need to do your research on alternative lenders. In this case, it’s best to get in contact with a regulated mortgage adviser to ensure that you find the right residential mortgage for your situation.
Generally speaking, how long the remortgaging process will take depends on the lender, as some can be trickier than others. For instance, if you need to approach a specialist lender, it may take longer for things to go through.
What happens if I don’t switch mortgages?
If you do move into your BTL property without switching to a residential mortgage, you could be committing fraud and the consequences could be dire. Your lender would be well within its rights to ask you to repay your mortgage in full.
Do lenders treat BTL and residential mortgage applications differently?
This means that the amount you can borrow in relation to the value of the property is generally lower for BTL mortgages.
For instance, the maximum you could hope to borrow is typically around 80% of the property’s value, which means you would need at least a 20% deposit, compared with a residential mortgage where you could borrow 95%.
Not only are BTL mortgages more expensive than residential mortgages when it comes to interest rates, but arrangement fees can be a lot higher, too.
There are also differences in how affordability is assessed. For a residential mortgage, income from employment, pension, benefits and a myriad of other sources is used to determine whether you can afford the mortgage repayment.
For a BTL mortgage, while income is still used to determine if you will get the mortgage and under what terms, it is usually assessed as a percentage of the mortgage payment – typically at least 125%, but this can be as much as 145% of the mortgage payment.
Given stricter BTL lending criteria, these mortgages are often considered to be harder to get than residential mortgages.
More guides on Finder
The Warm Home Discount Scheme explained
Find out who gets the Warm Home Discount automatically, who needs to apply and how to do it. Plus more tips for saving on your energy bills.
What you need to know about getting a mortgage if you’re buying or refinancing a farm or farmland, including the factors lenders consider when you apply for one.
Mortgage for a pub
Everything you need to know about taking out a mortgage to buy or refinance a pub. Find out where to get one, how to get the best deal and the factors lenders consider.
Mortgage for a hotel
In-depth guide to taking out a commercial mortgage to buy or refinance a hotel. Find out how to get the best rates, factors lenders consider and what you need to apply.
Bridging loan vs commercial mortgage
Find out if a bridging loan or commercial mortgage would suit you if you’re buying or refinancing commercial property and when a bridging loan can be a better option.
How much deposit do I need for a commercial mortgage?
Find out how much deposit you need if you’re taking out a commercial mortgage, including the factors lenders take into account, and how to get the best deal for you.
How to buy Dogecoin
This guide explores how to buy and sell Dogecoin on an exchange as well as where you should store your cryptocurrency.
How to buy shares in Manchester United
Looking to buy Manchester United shares? Our guide shows the Manchester United share price and explains how to buy shares in the club (capital at risk).
Getting a 5% deposit mortgage under the government’s new guarantee scheme
Learn more about the new government scheme that allows first-time buyers and home movers to get on the property ladder.
Fix and flip
Read our in-depth guide to fix and flip and how this type of property investment works, including the factors you need to consider, the risks to be aware of and how to finance it.
Ask an Expert