Family Buy-to-Let Mortgages

What is a Family Buy-to-Let mortgage?

A Family Buy-to-Let mortgage allows you to buy a property and rent it to relatives. It’s one way to help your child or grandchild if they need a place to live. It also allows you to live in the property at the same time.

If your loved one will occupy less than 40% of the property, you can apply for a standard Buy-to-Let mortgage
If your loved one will occupy more than 40% of the property, you will need to apply for a regulated Family Buy-to-Let mortgage.

Need a hand working out what’s right for you? You can chat to a friendly expert from Saga Mortgages, who will provide all the help you need.

As with any mortgage, the loan will be secured against your home. If you don't keep up with your monthly payments, you may lose your home.

What are the benefits of a Family Buy-to-Let mortgage?

Help a young family member

Now more than ever young people are finding it difficult to buy their first home. “It is probably the most expensive it has been in the last 70 years for first-time buyers to get into homeownership,” wrote The Building Societies Association’s Paul Broadhead in 2024.

In addition, the rental market has become more challenging. According to Zoopla’s Rental Market Report: March 2025, rent costs are rising and availability is 22% below the pre-pandemic average. Therefore, by getting a Family Buy-to-Let house or flat, you can help a loved one in the current property climate.

Earn a regular income

You might still be working and looking to top up your salary. Or perhaps you’ve already retired and want a boost to your income. A Family Buy-to-Let mortgage could be your route to the extra finances you need.

Especially at a time when the cost of living feels tough. By receiving regular rental payments from your family member, you can supplement your bank balance every month. And at the same time, you can give them the home they need.

Invest in a property

Whether or not you choose to live in the property, you could benefit from any rise in its value. It’s hard to know when house prices will go up or down in the future. But if the market works in your favour, you might make a profit one day. You could keep the proceeds of the property sale yourself.

But you could also come to your loved one’s assistance once again. If they’re looking to get on the property ladder, a lump sum could really boost their options. Here at Saga Mortgages, we offer a range of ways to help increase the buying power of your children or grandkids.

What are the risks of a Family Buy-to-Let mortgage?

Your money will be tied up

With a Family Buy-to-Let mortgage, your money will be locked into a property for a certain period of time. If you might need those funds in the near future, you could consider other options, such as an Income Boost.

This is where you use your income to boost the buying power of your loved ones. There are other mortgage options for parents and grandparents, which can also be property investments in retirement. For more ways to help your relatives buy a home, see how Saga Mortgages can support you.

You may need a bigger deposit

Family Buy-to-Let mortgages tend to require larger deposits– often over 25%. This means you may need more upfront capital to purchase the property.

You might pay more tax

There are several ways that Family Buy-to Let-mortgages can change your tax situation.

1. By earning more thanks to your rental income, you may need to pay a higher rate of tax.
2. If you’re buying a second property, you may need to pay a Stamp Duty Surcharge.
3. When you come to sell the property, you will need to pay Capital Gains Tax.

It’s best to chat to a professional tax adviser before making any decisions.

You’ll need to look after the property

When you’re the landlord of a property, you need to take care of repairs or upgrades. For example, the boiler could break down or you may need to make changes in line with EPC requirements

It’s important you have money set aside for any costs along the way. If you want to stow some away safely, Saga offers a range of savings accounts. You can expect competitive rates and no hidden fees.

Get a Family Buy-to-Let mortgage with Saga

If you want to explore your Family Buy-to-Let options, Saga Mortgages can help you. We partner with an award-winning mortgage broker called Tembo. They offer expert advice and access to specialist mortgage deals. See if you could help a loved one solve their housing needs today.

Important

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up with payments on your mortgage. Saga Money may receive payment from Tembo if you get a mortgage offer via the Saga Mortgages service. This will not affect the amount you pay for the service.

Saga is a registered trading name of Saga Personal Finance Limited, which is registered in England and Wales (company number 3023493). Registered office 3 Pancras Square, London, N1C 4AG. Saga Personal Finance Limited is authorised and regulated by the Financial Conduct Authority under the registration number 178922.

Tembo Money Limited (12631312) is a company registered in England and Wales with its registered office at 18 Crucifix Lane, London, SE1 3JW. Tembo is authorised and regulated by the Financial Conduct Authority under the registration number 952652. Tembo Money was awarded Best Mortgage Broker at the British bank awards in 2022, 2023, 2024 and 2025.