Renting house - do we have to transfer to buy-to-let mortgage

Peelie_2

Hi there - my husband's job has moved overseas for 2/3 years and we therefore need to rent our house. Our mortgage lender (Lloyds) is forcing us to change to a buy-to-let mortgage. This is £400 per month more expensive and will not allow us to return to our current rate. Any advice on avoiding such fees or working around the system? Thanks.

Fuzzyness

if they wont give you consent to let on your current residential mortgage you have two choices: accept the buy to let offer lloyds are offering you or look about for a better deal elsewhere from another provider. I'm sure someone else will be along to tell you why you shouldnt be able to benefit from a residential mortgage when you are letting out your property.

Dave_Ham

I am surprised Lloyds would not grant consent to let, I would ask them specifically why they will not grant this for a good reason (which you have by the way)

Obviously if you have already been renting this for years, or there is another issue preventing you from obtaining consent let they must at least tell you.

jamesml

Out of interest, are there any conditions like LTV that affect whether they will grant the right to let?

I'm looking to buy and there is the (potential) possibility that my job may move me overseas in a 4/5 years time - by which time I don't expect to have made a significant inroad on the relatively low LTV I will have if I buy now.

danielley

I know that some providers dicatate that there should be maximum of 70% LTV for buy to let. This does vary though.

Some clever person will probably come along with a link to a table of which lenders allow without change in LTV.

orionsquare

I think C&G have recently changed their stance and have become really fussy about their products. I am speaking from personal experience. I should think that you are better off switching to another lender at this stage, and it may be better for you in terms of interest rates, especially if you are not tied in with C&G on a fixed term. If you are, it does not do you any harm to speak to an independent mortgage adviser who will be in a position to work out the savings as well as the early repayment penalty and be able to tell you the pros and cons of switching lenders.

I hope this helps.

Thrugelmir

Peelie wrote: »

Any advice on avoiding such fees or working around the system? Thanks.

This is Lloyds way of forcing you off the low interest rate you are currently paying.

Peelie_2

Hi - thanks for the responses. There is no reason, it would seem, other than Lloyds having changed its policy on Jan 1 and taking the opportunity to change our deal and get more money from us. House has never been let before, been in it for 12 years or so, lots of equity etc etc. And we will be back in three years, at which point we will have to pay to revert to a normal mortgage. Complete nonsense.

Wh05apk

I think the issue is the 3 year term, consent to let is normally only done for a 12 month period and is seen as short term, I suspect they feel 3 years is long term and you should move to a btl product.

cotleigh

With hindsight, if you know or suspect that the duration of letting your house would make a lender force you to move to a more expensive BTL loan, the solution would be to tell them its only for a year, and then tell them you want to extend it bit by bit later on!