Consent to let affect new mortgage borrowing?

Rainbowsend_2

HI,

Our current provider has said we are able to convert our current mortgage to 'consent to let' for a fee of £100, valid for a year, followed by review (RBS One Account).

We are hoping to buy a new family home whilst we decide whether to keep the current house or sell it.

Will the consent to let affect how much we can borrow for the new home?

Thanks

HappyMJ

Yes and no. The mortgage can be used in the calculation but the income from the rent you receive will offset any interest expense of the mortgage. If the rent received is more than the interest then it will be ignored.

BTW...I have a consent to let on my property with the Virgin One Account. Same as RBS...that was free and was for the life of the mortgage.

And...When I was looking to move into another place they (The One Account) offered to put both properties under the same mortgage as long as the total of both properties LVR is under 75%.

kingstreet

Depends on the new lender.

Some will ignore a let property "in the background."

Others will "tax" you the monthly mortgage cost off your income as they would with any other loan.

Finally, some lenders will deduct the mortgage amount from what you can borrow, reducing your potential new mortgage that way.

Thrugelmir

Rainbowsend wrote: »

We are hoping to buy a new family home whilst we decide whether to keep the current house or sell it.

Don't base your decision on residential mortgage rates. BTL is a different beast in terms of products available.

dimbo61

Be aware that your lender is only offering you CTL for one year and may hike the fees or mortgage rate in a years time????
They may even force you to change onto a BTL mortgage and repay your existing mortgage