TMB Standard Variable Rate increase etc - can I surrender the property?

alpinestars748

I have today received a letter from TMB advising me that my buy-to-let mortgage will be increasing to a rate at 4.95% from Jan 01st 2012. (The mortgage was a 5 year stepped tracker).
I know the FA's out there will be screaming the same "youve had the good times...." etc etc and I accept that, but wonder if anyone could offer advice.
Im pretty sure my situation is far from unique, but here goes...
When I agreed to the TMB mortgage product 5 years ago, I always intended to remortgage onto either another product with TMB or move to another lender at the end of the redemption penalty period.
Due to the market conditions I have no equity in the property (in fact it could be as much as 10 to 20% negative at the moment).
The rental income I am able to acheive nowhere near covers the mortage at this new rate and due to my current financial circumstances, I do not have the means to make up the difference each month.
My question is simple- rather than running into a downward spiral of arrears/ penalties/ fees over a period of sleepless months/years, can I choose to surrender the property NOW?

I cant see any other way out. Remortaging is not an option and I cannot meet the payments at the SVR.
I hope that somebody may be able to offer some constructive advice?

Thrugelmir

Handing the keys back is called voluntary repossession. Ring your lender and explain the situation.

You will still be liable for the shortfall on discharging the mortgage. So depending on your overall financial situation be prepared to fund this.