consent to lease - extra 1.5%

Kopite1976

Having been unable to sell my property 3 years ago I decided to let it out.

I was given consent to lease by my mortgage lender.

Now, 3 years on, they have told me if I am still letting it out, they will add 1.5% on to the SVR.

This is outrageous.

I'm sure I have no options but is there anything I can do?

Are there any loopholes?

Trying_to_be_good

I'm assuming you have a residential mortgage, and have been allowed to keep that. They're offering to let you keep the residential mortgage subject to a 1.5 percentage point addition to the interest rate as you're now using it as a buy-to-let.

The other options are to move in to the property, so it's a normal residential mortgage, or switch to a buy-to-let specific mortgage, that's designed for investors (as you've now become).

somethingcorporate

Just be thankful they gave you 3 years without increasing the rate, they didn't have to.

Have you compared your new rate to a typical B2L mortgage at your current values? you may find it is still very competitive.

Remember letting out a house is a business and you need to treat it as such, the mortgage company certainly appears to be.

Kopite1976

you're probably right, its just that it was never intended to be a long term plan but i know, even 3 years on, that it wouldnt sell (for anything like i paid for it).

i'll contact them to see if they will offer a BTL.

somethingcorporate

Try using a broker to do the legwork for you. You may find even at SVR+1.5% it is still better than any B2L rate you can find.

I will face the same problem as you next year so feel your pain!

Kopite1976

Thanks

If i move lender i would imagine there would be fees in region of £2k to set up.

Anyone know if Nationwide does BTL?

somethingcorporate

If you go to the Nationwide homepage they say they do them through TWM:

http://www.tmwdirect.co.uk/

link to latest B2L products for TMW:
http://www.themortgageworks.co.uk/includes/pdf/T23_v107.pdf

brit1234

Kopite1976 wrote: »

you're probably right, its just that it was never intended to be a long term plan but i know, even 3 years on, that it wouldnt sell (for anything like i paid for it).

i'll contact them to see if they will offer a BTL.

Have you enough equity for a buy to let product? You may need about 25% equity and a income of say around £35k.

angelsmomma

My buy to let is through TMW and the set up fees were £1300 on a £65000 mortgage last August. The interest rate is 5.19% so maybe the offer of 1.5% increase is not so bad after all.

Cross posted with brit1234. Yes my equity was 25% but I did not need an income of £35000

GMS

Most BTL lenders now have a minimum income require ment of £25,000. TMW do not but reserve the right to ask for proof of income.

OP a 1.5% loading on your rate is not outrageous as you went from a residential mortgage to a commercial arrangement. As has been said there would probably be fees to be added to any BTL mortgage and the rate may well be no better than you have now even with the loading. Rent would also need to cover the mortgage payment plus 25% typically.

Have a chat with a broker to see what can be done, if anything.

Kopite1976

Thanks all