Do I need a buy to let mortgage?

shropsue

I'm about to move and let out my existing house. My mortgage is with Nationwide, who tell me they will increase my interest by 1.5% a month (and charge me an admin fee of £50 to do it!).

On principle I'm now inclined to switch my mortgage elsewhere. Do I have to have a buy to let mortgage to let my house out? If not, is there a list anywhere of financial institutions that will allow you to rent out on a residential mortgage? I won't have a mortgage on the new house, so this will be the only one.

Additional question - I had assumed I could offset the mortgage payments against the rental income for tax purposes but I've just read that I would need to switch to an interest only mortgage (I've got a repayment mortgage) to do this. Is that right?

Thanks!

silvercar

Search this forum for "consent to let", lots of discussions on this. Bear in mind that to apply for a residential mortgage with the intention of letting it out straight away is fraud, obtaining money by deception, so you would need to declare it on your application.

You can offset the interest on your mortgage against rental income. If it is an interest only mortgage then all the payment is interest. If it is a repayment mortgage, part of the payment is interest and you can offset this part of the repayment. You would need a statement from your lender identifying how much you have paid in interest.

luckyfool

Feel free to cut your nose off to spite your face, but any new buy to let mortgage is likely to be more expensive than even the Nationwide + 1.5% rate.

TrickyDicky101

Depending on your situation/the relative values of your existing home/future abode you could consider mortgaging the future residence and using that to pay off the Nationwide mortgage on your current place. You would need to take advice from an accountant whether you would then be allowed to expense any of the mortgage interest you would then be paying on your own residence against the rental income you receive.