Converting from Residential to Buy to Let Mortgage

dboyce15

Hi,

Couple of questions on this subject.

Is it possible to convert my residential mortgage to an interest only buy to let mortgage?

Also, if I can make this conversion and stay with the same lender will I have to pay another deposit?

kingstreet

If you are staying with the same lender you don't convert to buy to let, you simply request consent to let. This may be granted with an increased rate, payment of a fee, both or even neither. It depends on the lender. Conversion to interest-only is also completely at lender's discretion.

If your lender will not grant consent then you consider remortgaging onto a buy to let product with a different lender.

The deposit as you call it is your equity in the property. This needs to be around 25%, leaving you with a mortgage of 75% of the loan to value.

BTL products typically require you to have a rental income which is 130% of the monthly mortgage interest using an assumed rate of around 7%pa. You may also be required to have a personal income in excess of £35k pa by some lenders.

dboyce15

makes sense.

to give a bit more information:

The house is valued at £92k, we paid a 10% deposit and have paid off another 5% through our mortgage.

Rental property in the area currently goes for £575, so about 123% of our monthly mortgage and our joint income is around the £40000 mark.

Do you think we could get CTL for a two to three year period?

Dave_Ham

Depends on the lender and why you want to consent to let..

dboyce15

lender is Santander and the reason is that I'am moving for work.

Dave_Ham

Then you need to speak to Santander and ask them the question, I would expect this to be a valid reason.

Loan to value and whether you are on repayment may be an issue for them, but have not seen a Santander one recently.

Rule of thumb on the banks tends to be that if you are on a fixed deal, they tend to let it ride - although do check this with Santander as they are all amending their policies all the time at the moment.

Good luck

dboyce15

ok, thanks Dave