On your own
Whether you have a property already, or are thinking of buying a second home to rent out to loved ones, a family Buy to Let mortgage could be the answer. Create a free Tembo plan to see what options are available to you, including your max borrowing potential, personalised rates & indicative repayments.
A family Buy to Let mortgage is when you take out a mortgage on a property you intend to rent out to family members. It's a great way for parents to provide their child with somewhere to live as a student in return for rent, or provide your children, parents or grandparents a place to call their own. If you want to rent out part of your property to a family member while also living there, a family Buy to Let mortgage also lets you do this.
If your family member intends to occupy less than 40% of the property, then you can use a standard Buy to Let mortgage. However, if they occupy more than 40%, you will need to make sure you get a regulated family Buy to Let mortgage. This means the mortgage loan is regulated by the FCA, and normally has tighter requirements than a standard Buy to Let. As an experienced mortgage broker, we can help you navigate these requirements and find the right option for you.
All mortgages have risks and benefits. Here are some key things you should know before applying for a family Buy to Let mortgage.
Get a regular source of income
Although you are renting out to family, a Buy to Let mortgage can be a great way to get an additional source of regular income. This can supplement your earnings from your main job, or be a nice top-up during retirement.
Benefit from any property price growth
Investing in a Buy to Let property over a number of years can see you benefit from property price growth. Although it's not guaranteed that house prices will go up, any increase in the property's value will increase the amount of equity you hold.
Provide your loved ones with a home
The rental market can be competitive and costly. By investing in a family Buy to Let property, you can help your loved ones find a suitable home and protect them from unfair rent increases.
Live in the property too
Unlike a standard Buy to Let mortgage, with a family Buy to Let set up you can live in the property alongside your family member. This can make it an ideal set up if you want a place of your own, and want to help your sibling, child, parent or grandparent at the same time.
Your assets are locked away
By investing in a Buy to Let property, you will be tying your money into a property for a number of years. If you want to help a family member get a place of their own, but are unsure about locking away your assets, consider a Savings as Security mortgage or Income Boost instead.
You will have to maintain the property
As a landlord, you will be responsible for ensuring the upkeep of the property, including things like replacing broken boilers and ensuring it meets EPC requirements. This can be costly, and can eat away into any profit from rental income.
You might be taxed more
If you are a higher tax payer, or will become one by investing in a Buy to Let property, you will have to pay a higher amount of Income Tax. This could eat into your profits from your Buy to Let property.
You'll need a larger downpayment
If you are renting a property out to family, you will need to get a regulated Buy to Let mortgage, which often requires you to put down a larger deposit, sometimes over 25%.
If your son or daughter is struggling to buy a place their own, there are ways you could help them buy sooner. At Tembo, we specialise in a range of family assisted mortgages, including family Buy to Lets and guarantor schemes. Create a free Tembo plan with you and your child to see how you could help them make home happen.
Get a Buy to Let mortgage in 4 simple steps
In under 10-minutes, we’ll check your eligibility for a Buy to Let mortgage and find the best options for you from thousands of mortgage products. Plus, you’ll get a personalised recommendation including interest rates and repayments.
Book a call with our mortgage experts to complete the qualification process. We’ll cover any questions you might have about Buy to Let mortgages and any other family assisted schemes you might be interested in.
Once you’ve found a property, your dedicated advisor will undertake full affordability and submit a Decision in Principle with your chosen lender. Once accepted, we’ll submit a full mortgage application for you.
During the conveyancing process, we’ll liaise with the developer or seller and your solicitors to ensure a smooth purchase. We’ll also provide a free insurance protection review, so you’re covered if the unexpected happens.
Explore our other family assisted mortgages and schemes you might be interested in
With a guarantor
Add some or all of your earnings to a family member's household income as a guarantor to boost their mortgage affordability, helping them to get on the ladder sooner.See details
Unlock money from your own property to create a house deposit for a loved one from scratch or top up their existing deposit.See details
Buy to Let
Buy a new home to live in, then switch your residential mortgage on your current home to a Buy to Let set up and let it out to tenants.See details
Confused about Buy to Let mortgages and how families can help loved ones buy? Read our guides to brush up on your know-how
You can be snug in your very own home in 4 simple steps