Converting to Buy to let mortgage - fees

simoh

Hi,
I have just been told by Santander they require £295 to grant me permission to let out my property, currently on a residential mortgage.

Surely this is precisely the kind of unreasonable over-charging that the banks have been pulled up for. Is there anything I can or should do to bring this rip off to the attention of officialdom?

Many thanks

Accountant_Kerry

This isn't a rip off, the risk is higher, if they are willing to give you consent without increasing your interest rate you are doing very well.

<sebb>

When you took out the residential mortgage you agreed that it was to be your primary residence. Now you want to change that agreement and change the risk profile for the lender. You have two choices, pay up, or go to another lender for a buy to let mortgage. Chances are the buy to let mortgage will be on substantially higher rate so you'll be better off paying the fee. Look on the bright side, they might have just refused you outright. You don't have a definitive right to rent out your house while you have a residential mortgage in place.

dimbo61

Also remember that this will be for a period of time 2/3 years at most so dont complain if you get tenants long term and the lender wants you to change to a BTL

wonderman

To offer you a different view yes it does seem to be a lot of money.
Santander obviously feel comfortable with you as a good credit risk and if you have a fair amount of equity in the property then actually the "risk profile" to Santander is still close to zero no matter who is living in the house - Santander can always repossess the house and recover the mortgage amount plus costs.
So the £295 is just another banking fee set at a level that "we can get away with" rather than a fee that represents any sort of value added work.

diable

Off set it against your tax bill and as other poster have mentioned you are lucky they are not charging you a higher interest rate.

<sebb>

wonderman wrote: »

To offer you a different view yes it does seem to be a lot of money.
Santander obviously feel comfortable with you as a good credit risk and if you have a fair amount of equity in the property then actually the "risk profile" to Santander is still close to zero no matter who is living in the house - Santander can always repossess the house and recover the mortgage amount plus costs.
So the £295 is just another banking fee set at a level that "we can get away with" rather than a fee that represents any sort of value added work.

OK, but ignoring the risk profile argument, there's paperwork to deal with, investigations to be done etc. Most re-mortgage deals these days have fees attached, some as high as £1000. Why is this any different? Plus I wouldn't mind betting the OP gets to hold on to some ridiculously low rate that new borrowers don't have a hope in hell of achieving, and no one looking for a buy to let would get.

I don't see why people believe they have the right to get round getting a buy to let mortgage by getting a residential mortgage then converting it to consent to let free of charge.

skint-student-nurse

Thats cheap! Santander charged me £495 for the same privilege!

wonderman

<sebb> wrote: »

OK, but ignoring the risk profile argument, there's paperwork to deal with, investigations to be done etc. Most re-mortgage deals these days have fees attached, some as high as £1000. Why is this any different? Plus I wouldn't mind betting the OP gets to hold on to some ridiculously low rate that new borrowers don't have a hope in hell of achieving, and no one looking for a buy to let would get.

I don't see why people believe they have the right to get round getting a buy to let mortgage by getting a residential mortgage then converting it to consent to let free of charge.

I agree it is not different. The mortgage arrangement fees are a rip off too. They did not exist a few years ago and when credit frees up again they will disappear again. I am afraid the banks are still being greedy greedy greedy and we are having to pay up because they are all being greedy together.

smartandshrewd

That's very good, both £295 and £495. I would certainly not grumble at that. I'm looking to get consent to let with Santander at the moment, I expected they would be upping the interest rate too and charging a much higher fee?

oscardog

Don't forget to tell your insurer as well!!

You will need to change to a Landlord policy.