Natwest Consent to Let - Fixed rate ending, now what?

cpdc1030

Hi All,

I obtained consent to let from NatWest about a year and a half ago, on a property that I intend to continue letting for the foreseeable future. I'm currently on a fixed rate deal, which ends in March 2013. I'm on a repayment mortgage with 22 years left. My LTV is about 60% (conservative estimate), monthly interest is currently about £330 per month and rent is £844 pcm.

My question is around what exactly happens when that fixed rate deal ends.

NatWest is very vague on the topic both on their website and in the documents they sent me. All they say is that if I want to take out a new "deal", then I would have to apply for a BTL mortgage. That makes sense.

But what if I just let the existing mortgage continue on their SVR (currently 4%)? Is that even an option? I want to avoid a BTL if possible as the booking fees are absolutely ridiculous.

I understand the first response from some here might be "why don't you ring them to find out?". Of course that's an option. But I don't want to unnecessarily bring their attention to something that would not be in my favour (i.e. forcing me into a BTL at short notice).

If anyone has been in the same situation and can offer some advice on how to handle the situation, I'd be very, very thankful.

Cheers,
cpdc1030

wheldcj

I am in a similar position.

We spent 6 months this year selling our property only for our buyer to request a £3k "bung" at the last minute to continue the sale. We refused and our chain collapsed.

We are therefore considering renting our property in 2013 and either raising capital to buy a second property or letting a property in our desired area and waiting for the market to improve (time of the essence for our rellocation because of schools!)

Our current Natwest tracker deal ends in April and last year Natwest said to me that there was no issue with offering a consent to let as our current property had been bought on the basis of living in it not "buying to let".

However like you I wondered what would happen at the end of my deal, would they force me into a buy-to-let or similar deal?

My question is, would be it logical to move to a 5 year fixed deal at 1/4/2013 therefore circumventing any potential to be moved onto a more expensive deal in the medium term. Or would fixing my mortgage one day and then asking for a consent to let later in the week be frowned upon?!?

GMS

cpdc1030 wrote: »

Hi All,

I obtained consent to let from NatWest about a year and a half ago, on a property that I intend to continue letting for the foreseeable future. I'm currently on a fixed rate deal, which ends in March 2013. I'm on a repayment mortgage with 22 years left. My LTV is about 60% (conservative estimate), monthly interest is currently about £330 per month and rent is £844 pcm.

My question is around what exactly happens when that fixed rate deal ends.

NatWest is very vague on the topic both on their website and in the documents they sent me. All they say is that if I want to take out a new "deal", then I would have to apply for a BTL mortgage. That makes sense.

But what if I just let the existing mortgage continue on their SVR (currently 4%)? Is that even an option? I want to avoid a BTL if possible as the booking fees are absolutely ridiculous.

I understand the first response from some here might be "why don't you ring them to find out?". Of course that's an option. But I don't want to unnecessarily bring their attention to something that would not be in my favour (i.e. forcing me into a BTL at short notice).

If anyone has been in the same situation and can offer some advice on how to handle the situation, I'd be very, very thankful.

Cheers,
cpdc1030

If you do not have consent to let then you are in breach of your terms and conditions if you continue to let the property.

At 60% LTV you could potentially get a great rate on a BTL mortgage. Fees are not necessarily huge as you can tailor the fee to the deal, i.e pay a higher rate for a lower fee if the numbers stack up.

What is your income? Many BTL lenders have a minimum income.

Worth a chat with a broker as many BTL deals are broker only. Getting it done properly will stop you 'looking over your shoulder' and ensure that the property will be let with permission and correctly insured.

What is your current residential status?

cpdc1030

GMS wrote: »

If you do not have consent to let then you are in breach of your terms and conditions if you continue to let the property.

At 60% LTV you could potentially get a great rate on a BTL mortgage. Fees are not necessarily huge as you can tailor the fee to the deal, i.e pay a higher rate for a lower fee if the numbers stack up.

What is your income? Many BTL lenders have a minimum income.

Worth a chat with a broker as many BTL deals are broker only. Getting it done properly will stop you 'looking over your shoulder' and ensure that the property will be let with permission and correctly insured.

What is your current residential status?

I HAVE consent to let from NatWest. I don't think you've read my post correctly...everything is above board and insured.

To answer your other questions, my income is £60k, other household income is 50k. I am living in another mortgaged property which is joint with my partner. However I have sole ownership / mortgage of the let property in question.

When I was a FTB I saw a broker who wanted to charge me £1000 and give me an inferior deal to what I got directly with NatWest. What's the point? Getting the mortgage was by far the easiest part of the property buying process.
So maybe I am being unfairly biased against brokers, but that was my experience.

GMS

Apologies, I read as your consent was expiring.

May well be better rates available than the NAtwest SVR by moving to a BTL. Many BTL are broker only but if you don't liek brokers then that's up to you.

Good and bad in every industry.

cpdc1030

I understand I might be able to get a better rate through a broker, and I will try to be more open minded about it. Like you say, hopefully I just ran into a bad apple as a ftb.

But with a BTL the rate matters less due to the tax write off. One pound more in interest is really only costing me £0.60 (I'm in the 40% tax bracket). Arrangement fees however can't be written off in the first year, at least from my understanding. However I'd love to be corrected :-)

So...I will poke around for a better broker. But in the meantime, will NatWest allow me to stay on their SVR?

Simon_gloster

You cannot stay on their SVR. They have a diarised team which gets reports on ctl cases due for renewal. You will he offered a CTL rate based on their LTV not yours.

You could he lucky and slip through the net but that is unlikely. Not responding to their phone calls or letters as an eg they will rate load SVR by 1.5%, so best to contact them or remortgage to a BTL as discussed. The best BTL deals as mentioned are broker only avenues.

cpdc1030

You're both quite right that the best products aren't available direct. I hadn't realised how poor the direct BTL offers are.

I'm eyeing a 2 year fix at 3.99% with £295 total fees for a LTV up to 75%, so should be very safe with that even if given a down valuation. Sound reasonable?

Simon_gloster

Good to hedge your bets on 75% deals.than be disappointed if 60% arent available due to a downval.

Companies like birm midshires and mortgage works tend to specialise in btl's.

Staying on natwests svr is a poor option, ctl even less.

Morgage_Confused

Anyone have any idea if the broker only btl deals are much better than say TMW.

GMS

Morgage_Confused wrote: »

Anyone have any idea if the broker only btl deals are much better than say TMW.

Depends on the individual circumstances and preferences. Impossible to answer.