Options to help me go travelling

Robbie99

Hi, I'm keen to go travelling in around 12 months time for a period of 12 months. I'm worried about what to do to cover my variable mortgage payments while I'm away. I've a few questions running around in my head which I'd be grateful for some help with, so thanks in advance.

I have a cracking deal with HSBC that I've had for a year or so. It's a repayment tracker on 0.99% above BoE base for the term - another 18 years. I am pretty certain this is a good deal for me so I don't want to lose it. Currently my payment is £592p/m and it was £860p/m when base rate was 5%. My house is likely to give me about £600p/m in rent if I let it out, and I could save up £4000 or a bit more as a "top-up" fund shortfalls between rental income and my usual payment should interest rates rise. I'd prefer permission from HSBC for the letting, but I'm prepared to let the house without it.

So, here's the questions!
1. Will my lender be receptive (with no hike in rates) to me letting the house while I'm away??
2. Will my lender let me switch (for a admin fee maybe) from repayment to interest-only then back again for all or some of the twelve month period?
3. Could I use the £4000 top-up fund differently? e.g. pre-pay/overpay, or buy insurance against rates rising?

I know I could just ask my lender, but I don't really want to give them clues that I might let the property without their consent (and they're closed!). So I'm trying to come up with the best strategy. My ideal solution would be that they say yes to me letting it out for 12 months and I can guarantee to afford keep making the payments on a repayment basis. If things become difficult due to high interest rates (BoE > 5%) I'd like to know that I have the flexibility to switch to interest only.

Thanks
Rob.

poppy10_2

You have to let them know. They will normally give you conset to let, for an adminsitrative fee which can vary from a few pounds to several hundred pounds.

Thrugelmir

You will also need to notify the Inland Revenue if you are letting. As any net profit will be taxable.

How will you have the property managed if you are away?

_Andy_

How much do you owe on the mortgage and how much is the home worth?

Robbie99

Hi, I owe £113k and the house is worth £130k tops. I expect to use a letting agent or I may just let to friends/family. I know they often require proof of consent but I'm pretty confident I can get round that if needs be.

I was aware of the tax thing too, however, I'm pretty sure there will be no net income from this, hence the £4000 top-up fund. I'll actually be due a pretty nice tax rebate for next financial year as I'll be paying income tax on my £41k salary April, May, June and then I can submit a P85 to say I won't be working any more that tax year. I'll get paid back the difference between tax paid to June, and the tax payable on a £10,250 annual income (i think).

Does anyone have experience of requesting permission from HSBC for a letting? If it can be obtained for a couple hundred pounds then great, I just don't want 2% added to my interest rate thats all.

Thanks,
Rob.

Robbie99

I've just checked my initial mortgage papers from HSBC and the value stated for the house there is £143k. However, 15 months on, i'm sure £130k is optimistic.

Thanks,
Rob.