Written by The Prosperity Wealth Team. In this 2025 guide we look at how to convert mortgage to buy to let. Our property investment specialists are qualified professionals with years of experience helping clients build and manage successful property portfolios across the UK.
Thinking of moving to a new home or relocating for work? This presents an opportunity for your current property. While selling is an option, keeping it as a rental property can be a profitable long-term investment. This leads many homeowners to ask: “Can I convert my residential mortgage to a buy-to-let?”
The answer is yes. This move transitions you from a homeowner to a property investor and requires a change in your financing. In the UK, there are two main ways to do this. This guide explains your options, the costs and the steps needed for a successful transition into becoming a landlord.
Client Testimonial:
“Investing in buy-to-let from abroad felt risky. Prosperity Wealth made the process simple with a professional team that handled everything for us. Their detailed plan included everything from legal work to rental yield forecasts, giving us full confidence in our new Birmingham rental property.”
~ Hendrik Petrick
When you let out a property, it becomes a business asset. Lenders assess this differently from a personal home, so your residential mortgage is no longer suitable.
You have two strategies:
Let’s explore what each strategy involves.
If you want to keep your current property as a rental, you must have the correct mortgage product in place.
Consent to Let is temporary permission from your mortgage lender to rent out your property. It is not a new mortgage. Your two main options are securing a short-term “consent to let” or remortgaging to a full buy-to-let product.
This is the formal solution for long-term landlords. It involves applying to switch your mortgage to a dedicated buy-to-let (BTL) product with your current lender or a new one.
To be successful, you will need to meet stricter criteria:
There are many benefits of investing in a buy to let property, read more about them here.
The table below shows both strategies side by side for comparison.
| Feature | Consent to Let | BTL Remortgage |
| Type | Temporary permission from your current lender | A new, formal mortgage product |
| Duration | Short-term (usually 6-24 months) | Long-term (for the life of the mortgage) |
| Best For | Short-term letting, avoiding ERCs | Becoming a long-term landlord |
| Costs | Admin fee or interest rate increase | Arrangement fees, legal fees, valuation |
| Process | Simple request to your existing lender | Full new mortgage application |
If you are not moving but want to invest in property, your home can be a financial tool. You can leverage its equity to fund the purchase of a separate BTL property.
Releasing equity involves remortgaging your home for a larger amount. The new mortgage pays off the old one and the difference is paid to you as a tax-free cash sum. This can then be used as a deposit for your BTL property.
Releasing equity gives you the capital, but capital alone doesn’t guarantee a successful investment. The UK property market is complex, with yields varying significantly by city and even by postcode. This is where our expertise becomes your advantage. We specialise in identifying and securing high-yield, off-plan, and tenanted properties in growth hotspots like Birmingham and Nottingham, ensuring the capital you’ve worked hard to release is put to the best possible use.
Profitability in the BTL market depends on managing costs and taxes.
From Our Experience: When budgeting, many new landlords focus on the mortgage and tax but overlook a crucial cost: void periods. We advise clients to budget for at least 3-4 weeks per year without rental income as a safe buffer. Choosing a property in an area with high rental demand, which is a core part of our sourcing strategy, significantly minimises this risk.
Buying an additional property means you will pay a higher rate of SDLT. Remortgaging your existing home does not trigger SDLT. You can find the latest rates on the official GOV.UK website.
Rental profit is added to your other income and taxed. Under Section 24, landlords can no longer deduct mortgage interest costs from rental income, instead receiving a 20% tax credit.
When you sell your investment property, you will pay CGT on the profit. For residential property, this is charged at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers (Source: GOV.UK, 2025/26 tax year).
Due to the tax implications of Section 24, many investors now purchase BTL properties through a limited company, known as a special purpose vehicle (SPV).
This structure offers a key tax benefit because a limited company is not affected by the Section 24 rules. This means:
This approach is advantageous for higher-rate taxpayers and investors planning to build a larger portfolio.
However, there are other factors to consider. Mortgages for limited companies can have slightly higher rates and fees, and you will have the administrative duties of running a company, like filing annual accounts. Extracting money for personal use also has tax implications. It is important to get specialist advice from an accountant and a mortgage broker to see if this is the right strategy for you.
From Our Experience: While SPVs offer significant tax benefits, lenders often require directors to have a clean credit history and sometimes property experience. We can guide you through this process and connect you with brokers who specialise in limited company mortgages, smoothing out potential hurdles.
Lenders use a rental income test to approve a BTL mortgage. Understanding this calculation is key.
Worked Example:
Read more on investing in property in our: Buy-To-Let Property Investment Beginners Guide UK 2025
Once your new mortgage is in place, you become a landlord with legal duties. These include arranging:
From Our Experience: First-time landlords often underestimate valuation fees. While online calculators give an estimate, we recommend budgeting around £300-£500 for a typical BTL valuation to avoid any surprises in the application process.
Managing these legal responsibilities, finding reliable tenants, and handling maintenance can be a significant time commitment, especially for overseas or first-time investors. This is why many of our clients opt for our fully-managed, ‘armchair’ investment service, which handles every aspect of the tenancy for a truly passive income.
Converting your mortgage or releasing equity are effective ways to become a property investor. Success in 2025 requires a professional mindset and a clear strategy from the start.
Here at Prosperity Wealth, we make buy-to-let property investing more accessible and simpler by sharing our wealth of experience and knowledge with our clients. Choosing the right property is the most important decision you will make.
Client Testimonial: “We have now happily purchased two UK buy-to-let properties with Prosperity Wealth. Even when our second purchase was complicated by difficult lenders, their team’s support was the one constant. As expats, they have been essential in helping us build our UK property plan.”
~ James Robinson
Whether you are securing Consent to Let for a short period, remortgaging for the long term, or releasing equity to build a portfolio, the financial steps are just the beginning. The true measure of success lies in the performance of your asset. At Prosperity Wealth, we bridge the gap between financing and investing, ensuring your journey into the buy-to-let market is both profitable and professionally managed from day one.
Ready to turn your property equity into a performing asset? Whether you’re based in the UK or overseas, our team is ready to help you. Schedule a no-obligation consultation today to discuss your goals and discover our exclusive, high-yield property developments. You can contact us by phone on +44 (0) 121 237 4610 or by email [email protected].
No, not if you are remortgaging your current home. You only pay SDLT when you purchase a property. You will pay the additional SDLT rate if you are buying a new investment property.
Lenders need the monthly rent to cover the mortgage payment by 125% to 145%, calculated at a high ‘stress test’ interest rate to ensure the investment is viable.
Letting a property on a residential mortgage without permission is a breach of contract and mortgage fraud. The consequences are severe: your lender can demand immediate repayment of the entire mortgage and it will damage your credit rating.
Yes, buy-to-let can still be profitable. With strong rental demand and strategic property selection, landlords can achieve both steady income and capital growth. Partnering with Prosperity Wealth ensures your investment is expertly managed, allowing you to maximise returns while reducing stress. We deep dive into buy to let in 2025 here: https://prosperity-wealth.co.uk/news/is-buy-to-let-still-worth-it-in-2025/.
Last updated: August 2025
