consent-to-let mortgage increase

corrugated

Hi

I recently requested a consent to let form from my mortgage company (Skipton Building Soc.) as I am moving abroad with my work and intend to rent out my house. I was surprised to see that, as well as charging a £100 administration fee, SBS will also increase my mortgage interest rate by 0.5%. This increase, plus the administration fee, means that the rent I receive will no longer cover the costs of the monthly mortgage repayments. Is it normal for a mortgage lender to charge this? I have a friend in a similar situation with a mortgage with HSBC, who did not want to charge her or increase her interest rates. I have always paid my mortgage on time and even made over-payments so I don't see myself as "a risk". Is there anything I can do to avoid these charges? I am tied into my current fixed-rate mortgage for another 2 years.
Many thanks.

socrates

corrugated wrote: »

Hi

I recently requested a consent to let form from my mortgage company (Skipton Building Soc.) as I am moving abroad with my work and intend to rent out my house. I was surprised to see that, as well as charging a £100 administration fee, SBS will also increase my mortgage interest rate by 0.5%. This increase, plus the administration fee, means that the rent I receive will no longer cover the costs of the monthly mortgage repayments. Is it normal for a mortgage lender to charge this? I have a friend in a similar situation with a mortgage with HSBC, who did not want to charge her or increase her interest rates. I have always paid my mortgage on time and even made over-payments so I don't see myself as "a risk". Is there anything I can do to avoid these charges? I am tied into my current fixed-rate mortgage for another 2 years.
Many thanks.

Yes it is

Your friend was lucky with HSBC

Have you obtained Landlords Building Insurance?

I assume Gas Safety etc.... has been arranged as well?

corrugated

Yep. everything else is sorted, thanks.

socrates

corrugated wrote: »

Yep. everything else is sorted, thanks.

Good luck 0.5% is not too bad trust me!

rent_and_buy

corrugated wrote: »

Yep. everything else is sorted, thanks.

Its a shame you never knew what was going to happen, when you took out the mortgage and then you could have checked, ive checked mine they charge a fee, but the rate stays the same.;)

silvercar

rent_and_buy wrote: »

Its a shame you never knew what was going to happen, when you took out the mortgage and then you could have checked, ive checked mine they charge a fee, but the rate stays the same.;)

Their policy can change. My lender has moved from "will consider your application" to "will definitely add 1% to the rate".

MarkyMarkD

Absolutely.

You originally took out the mortgage to live in the property yourself.

Letting it is a completely different deal.

At the very worst - but still legally and fairly - the lender can require you to redeem your original residential mortgage, pay any Early Repayment Charges applicable, and take out a replacement "buy to let" mortgage product, incurring any fees involved.

Simply adding 0.5% or 1%, and paying a relatively small fee, is getting off lightly.

corrugated

rent_and_buy wrote: »

Its a shame you never knew what was going to happen, when you took out the mortgage and then you could have checked, ive checked mine they charge a fee, but the rate stays the same.;)

Thanks. When I took the mortgage out 4 years ago I never intended to let the property so didn't check the rates. That's why it's come as a surprise.

rent_and_buy

corrugated wrote: »

Thanks. When I took the mortgage out 4 years ago I never intended to let the property so didn't check the rates. That's why it's come as a surprise.

Ive got it in black and white with my offer it states the fee and also says the interest will be the same, no one knows when they are going to rent, but if your in my position i probably will let my house in the future, so this was one of the main reasons i went with them.