Buy-to-let mortgage. Really?

rocketbunni

Hi,

Bought and have lived in our family home for just over 7 years; now facing the prospect of having to rent it out or sell and move back with family.

Surprised that when I contacted my existing mortgage provider they told me that to rent I would have to transfer to a but-to-let mortgage. I don't really think by definition we are in a buy-to-let situation.

Conveniently for the provider the buy-to-let interest rate is double that of our existing mortgage when we look at the figures this potentially kills the whole idea of renting the property stone dead.

Is forcing everyone on to buy-to-let mortgages commonplace? Have any of you had a similar experience? Is there a way to achieve a lower interest rate that would make the rental figures work and enable us to keep our home for the future?

Any thoughts much appreciated.

GMS

You would need Consent to Let as a minimum. If they choose not to grant this then you need a Buy to Let mortgage.

Ignore the 'Buy' bit. Applies to something you are refinancing to let too.

Thrugelmir

You wish to let the property out on a commercial basis. A BTL mortgage meets the requirements of this from the lenders perspective. As a residential mortgage no longer fits the bill.

Letting property does not automatically equate to a profitable return.

kingstreet

... and the lender is?

holly_hobby

Consent to let is completly at the lenders discrection, unfortunately if they have refused the request and you intend to let, you will need to remortgage onto a traditional But To Let arrangement. (as if you let without permission, you are both in breach of your mge T&Cs and blds insurance which is invalidated. This applies even to landlords ins, which is on the premis that you have the lenders permission to let the dwelling, and verified on any claim).

The associated costs and payrate will be higher than a residential mge (or CTL if they leave you on resi rates), but both the associated remortage fees and mortgage interest are permitted deductions from your gross rental income (although a higher payrate will obv affect reduce your net yield, albeit with a lower profit exposed to tax).

Hope this helps

Holly

rocketbunni

Thank you all for your quick replies.

At this stage I couldn't say who the mortgage provider is especially as I don't expect they're particularly unique in their approach.

Dave_Ham

Actually, they do all treat consent to let differently.

kingstreet

Typically, First Direct don't give it.

Halifax switches you to a three year fix at 5.5% and £1,000 fee.

Nationwide sticks 1.5% extra on your rate.

NRAM charges a fee of £1,250.

BoI charges a fee of about £200.

They are many and varied. No hard and fast way to answer questions about CTL.

_Andy_

"At this stage I couldn't say who the mortgage provider is" - why on earth not?

reformedEffortmaker

_Andy_ wrote: »

"At this stage I couldn't say who the mortgage provider is" - why on earth not?

The same question crossed my mind

angelsmomma

Leeds do give it but apply a 1% interest load and ongoing admin fees