Can HSBC force us to change to a BTL from a residential mortgage

Let_Us_See

If you original HSBC mortgage is a very low tracker, why does the rental income only just cover the mortgage? Could you increase the rent with new clients or is it due to a high loan to value?

beecher2

You need a plan for how you'll cope when base rates go up - particularly as the rent is only just covering the mortgage. So look at it from the point of view that your payments are going to increase at some point in the future, regardless of whether you get permission.

Clark80

Yes they can move you over.

If you do put your proprty up for sale you can contact the lender and advise them of this and not have to worry about changing the mortgage (assuming your tenant has left at this stage)

Chinkle

Sounds like you've left it to the last minute to deal with, considering a year was the maximum leeway the mortgage co were prepared to give you.

You are over extended and will probably take a hit somewhere to get out of the situation. If the switch to BTL isn't going to pay it's way then don't do it. Put the place up for sale at a reasonable price for a quick sale and fingers crossed it is that. In the meantime, if you have nice tenants explain the situation maybe they will be willing to be flexible, keep house presentable during the process in turn for a small rent reduction. That way you still get some income while the sale goes through.

luckyfool

Let_Us_See wrote: »

If you original HSBC mortgage is a very low tracker, why does the rental income only just cover the mortgage? Could you increase the rent with new clients or is it due to a high loan to value?

I would imagine this is because the mortgage with HSBC is on Capital and Interest, and possibly over a relatively short period, hence the higher payments. This mortgage was not taken out as a "buy to let" and as such you are probably off base in assuming that it was taken on interest only, and that the rental cover is inadequate.

Dan_1976

First thing to do is have a very long chat with HSBC. You have options like interest only or SVR's with no ties maybe. It sounds to me that you should sell it and ask for 6 months to do so from HSBC.