Does renting out flat change mortgage rate?

donniedarko9

I have tried and failed to sell my flat :mad: and have decided to rent it out and rent another place nearer my work. What are the implications of doing this re my mortgage? Will my mortgage provider keep me on the current rate or move me to another? I currently pay 2% above base with Nationwide.

Thanks in advance.

CloudCuckooLand

You can ask for "consent to let". Depends how long you've had mortgage, what LTV etc, whether they will agree. Should be a smallish fee.

In time, they will expect to convert to buy-to-let. Which will result in perhaps 1% on the rate and some higher fees.

Ask Nationwide whether you fit their criteria.

Dave_the_Ginger_Cat

It depends on your lender and your reasons for moving.

My lender in the past were OK with this as I moved in with my partner, but this was a little while ago, and they may have changed.

You'll need to do a number of things:

Gain their permission
Satisfy any conditions they put on - this could include a rate change
Pay any fees they request
Agree with your buildings insurer
Ditto conditions

And that's before the whole tenancy matters and notifying the HMRC.

Good luck and hope you find a solution

WhenIGrowUp...

Hello,

I was recently in a similar position - had to move for work but didn't want to sell so have let my house out. I'm with Nationwide too. They changed their policy last September, before that all you needed was a letter of permission and there were no fees - this enabled you to let the house out for a maximum of 3 years on your current mortgage with no fees and no change in interest rate. Unfortunately things are a bit less straightforward now, you can still let your house on your current mortgage but you need to pay a fee (from memory it's around £150) and then they add 1.5% to your interest rate during the letting period. The only good thing is that as far as I could tell they didn't take the LTV into account at all.

As I say, I did this a while ago so the figures might not be spot on but they are approximate!

Good luck!

donniedarko9

Cheers guys....tempted to not tell Nationwide to avoid these charges but that would probably come back to haunt me!

GAH

The amount of landlords out there, that rent their homes out without consent is huge, if they continue to receive their monthly payments as normal, they probably wouldn't ever find out.

Personally though I would do everything legitimately. Read your terms and give them a call, your rates may not change at all.

linz

take a look here at what you would need to do, looks like the additional 1.5% will start after the property has been rented for 6 months -

http://www.nationwide.co.uk/mortgages/usefulinformation/letting.htm

donniedarko9

Does anyone know what Nationwide would do if we didn't tell them and they found out...that link in the post above states "Under the terms and conditions of your mortgage, you must seek agreement from Nationwide to rent out the property prior to commencing the let and any breach in these conditions could lead to further action being taken"? What would the "further action" be?

cashandassetpoor

court action

_Andy_

donniedarko9 wrote: »

What would the "further action" be?

Certain death.

donniedarko9

_Andy_ wrote: »

Certain death.

:rotfl::rotfl::rotfl: