Should I change to a BTL mortgage?

KeithB31

I have a dilema. I am going to work abroad for a year (which may be extended) and want to rent out my property. I have a mortgage with Nationwide which is a fixed at 5.63% and comes to an end next year so within the time I want to rent out the property for. Would I have to change the mortgage to a BTL mortgage when the fix comes to an end? Also, they will levy a charge of 1.5% after the first 6 months and I will still be in the fixed term, it ends in 8 months. Will this effect my offer for the next term of my mortgage? I am not sure if I will return to the property and may carry on renting it out or I may come back to it after a year. It seems a big palaver to change to BTL when I may be returning to the property

holly_hobby

Consent to lets are usually the more cost effective option, as a new BTL mortgage will obviously include admin/product fees, which can be hefty as we they are essentially semi-commercial finance.

Once you have CTL with your existing lender, you are now operating outside of your residential t&cs (albeit with the tacit agreement of Nationwide). As such, they may levy any loading they wish both on any residential product you are currently on, or any subsequent SVR/BMR (when you come off your product).

You may wish to take the offer from Nwide to a whole of market mortgage broker, explain to them the issues (i.e soon to be expat). and what BTL providers and deals would be available to you.

If you do go onto a BTL product, upon your re-coccupation of the property, they will have to transfer you to either residential SVR/BMR or a residential product (which may involve ERPs on any BTL already held).

My advice, unless there is an absolutely storming BTL deal, with low fees and ERPS - stick to the CTL offered, at least until you know whether your being os the UK is medium to longterm.

Hope this helps

Holly