Can a Residential mortgage switch into a buy to let?

desi_kaur

Hi All

Long time reader first time poster

I am a first time buyer and have just decided to buy my own flat to move out of my parents house.

I have seen a flat i like and am now trying to decipher mortgages.

I am intending to move and live here for a year or so and then put it onto rent when i get married and move in with my boyfriend.

Do i have to just buy a residential mortgage and switch later on to a buy to let or is there some kind of licence fee that i can pay and keep my residential mortgage.

If so are there any good mortgages out there at the moment that anyone can recommend that has any easy switch policy.

I have a 15% deposit for a 200k flat.

Thank you for your help.

Kind regards


Desi

jonikarma

Hi Desi

Your best bet is to get a residential mortgage deal for 2 years now and then when your ready to rent out, inform the lender at that time. Most lenders will do this.

Halifax call it a consent to lease and they may increase the interest rate. After the 2 years, you re-mortgage onto a buy to let mortgage.

As for mortgages, you need to contact a whole of market mortgage advisor.

brit1234

If it is a newbuild flat you will need a bigger deposit.

You can get a residential mortgage and when you move out you can go to the lender and ask request to let. They can however turn you down.

Also you should make sure the rent portential will far exceed the mortgage payments. Do not rep]ly on capital apreciation as the value is more likely to fall over the next few years, possibly decade. A bit like in Japan in the eighties which had a similar economic problems.

property.advert

Japan did not have a problem in the 1980s which is about as accurate as your assumption that property will depreciate over the next decade or millennia, depending which post of yours one reads.

I guess you know less than zero about Japan but have heard some stuff on the TV.

brit1234

property.advert wrote: »

Japan did not have a problem in the 1980s which is about as accurate as your assumption that property will depreciate over the next decade or millennia, depending which post of yours one reads.

I guess you know less than zero about Japan but have heard some stuff on the TV.

Sorry miss typing, 90s.

Property is very overvalued and is highly unstable, it will correct.

MPlant

If you wish to switch your mortgage rate from residential to BTL in the future your mortgage lender will want to see that you have at least 25% equity in your property. If you have a residential mortgage that you are be fixed into it can be difficult to get 'consent to let' - banks have tightened down on people with residential mortgage letting their properties.

Some banks are more flexible than others. Halifax are particularly strict so I wouldn't advise getting a residential mortgage with them if you want to get consent to lease in the future.

Good luck with everything.

blt

I'm with C&G who told me that switching from a regular mortgage to a BTL is usually fine for them. They will charge you about £95 (sorry, can't remember the exact amount) and you can switch. They said that the 'deposit' was not an issue, ie it did not matter that I did not have the usual BTL equity/deposit. They did say, however, that although they would keep me on the standard variable rate (my fixed rate had expired), if I wanted a fixed rate deal in the future it would obviously be one of the more expensive buy to let rates.

Hope this helps