Increased mortgage costs for renting out property

February_Girl

Hi everyone,

I bought a new flat around 18 months ago, but having to rent it out in order to move closer to work. I told my mortgage provider what I was planning to do fully expecting to pay an admin charge, but was shocked when they told me that if I rented for more than 6 months they would increase my mortgage rate by 1.5%!! I rented out my previous property (same mortgage provider) a few years ago, and there was nothing like this - and no mention when I took out extra borrowing to buy the new property. When I questioned this they told me it was 'something we've just brought in'! Can anyone advise if this is legal, or whether it can be appealed?

Thanks!!

Dave_Ham

Hi there,

Unfortunately, there is absolutely no way around this. They change the product to a consent to let product and therefore they view it as a commercial arrangement and therefore increased costs.

Some lenders are slightly more flexilbe than others, although this is commonplace.

Sorry its not better news..

kingstreet

February_Girl wrote: »

no mention when I took out extra borrowing to buy the new property

That's because when you buy a property, your old mortgage ends and a new one starts. Contractually, you are now governed by the new mortgage terms and conditions from the start of the new mortgage.

Consent to let requires the lender to vary the terms and conditions of your residential mortgage and may do so at its discretion. By way of comfort, changing the current mortgage to a formal "buy to let" product may result in a higher rate and the imposition of large arrangement fees.

_Andy_

February_Girl wrote: »

Hi everyone,
Can anyone advise if this is legal, or whether it can be appealed? [/SIZE][/FONT]

Thanks!!

Yes it is legal.
No it can't.