Halifax suddenly forcing me to 'consent to let' product !

scoobey

Hi, I wondered if anyone can help me.

I have a property which I bought 15 yrs ago and have been renting out for the last 11 years for which the Halifax gave me permission.

Today I received a letter to say I have to re-apply for their consent and transfer to one of their consent to loan products. This means my rate increases from 3.5% to 5.69% (I'm currently on their SVR) and I have to pay a £990 fee for the privilege! Oh and if I don't they will add 1% onto my current rate and consider the tenancy I have granted as unauthorised, whatever that would mean.

What I would like to know is, can they enforce this as my original letter of consent from 11 years ago does not mention any expiry date or need to reapply? They said on the phone that the original consent was actually only granted for 2 years but it was their fault that they had let things lapse! However there is nothing on the original letter to say it was only for two years.

Also, the property is now worth 5 times the amount of my mortgage so my LTV rate is considerably low. Should this not make me a low risk and be taken into account?

To top it all, they've only given me a week to consider the two offers they've given me. This doesn't give me a lot of time to contact other lenders to see what they can offer me. Is this also allowed, or should I be given more time to consider?

I don't understand how I can be on the SVR for all these years with no problems, and suddenly they force me to move to a higher rate mortgage.

holly_hobby

Consent to let on a residential mortgage is at the complete discrection of the lender, indeed some lenders don't give any permission.

When a mge arrangement is changed to CTL usually there will be a loading applied to the original residential mortgage rate & an admin fee to pay, as technically this has now switched from residential lending to semi-commerical borrowing (market name Buy To Let).

The fact that Halifax have left you on straight residential SVR with no loading for 11 yrs, is fantastic for you as you should have been paying a lot more, so you have been v lucky there.

Halifax have now realised and accepted their error, and in doing so have advised that they need to review the current rate you are being charged, but will not be retrospectively applying any increase. (again in my opinion thats a good bit of business from your side of things).

They have asked you to reapply for the CTL. pay an admin fee and accept the loading on svr - unfortunately if you want to stay with Halifax then this is what you will have to accept.

The only other suggestion I can make is have a comparision with the Halifax CTL rate and those available on BTL in the market.

LTV to get a good choice of lenders would be 75% - although there are lenders who go to 80 & 85% (with higher interest rates of course).

Rental income general calculation of 125% of mortgage payment. (using 6% as ballpark calc figure)

Have a chat with a whole of market broker if you want to compare the best deals against the Halifax proposed rate & fee.

To answer your other q - unauthorised tenancy would equate to a breach of mortgage terms, which means that the lender may demand immediate redemption (repayment) of the mortgage (you will be given a timeframe within which they want redemption to have taken place).

Hope this helps

Holly