Involuntary landlord: remortgage??

LisaV

Wonder if anyone can offer me some advice.

I have owned a house (my first) bought at the height of the market in 2006, on a 30-year fixed rate 2 year mortgage with 10% desposit with Santander. The mortgage has since reverted to their SVR, about 4.8%.

I have been stuck on the SVR ever since. In 2012 I was forced to move jobs and cities, and therefore rented out my property (a 3 year consent to let, which is now nearly 2 years through).

I estimate that I currently have no more than 20% equity in the property. I am renting it out for £130/month less than I pay on the mortgage (ie I am supplementing the mortgage by £130/month plus other costs of keeping the property in rentable condition etc)

With interest rates widely considered to be rising in the future... would it be worth me remortgaging now (to what will be a higher rate that what I am on at the moment) or should I stay put at the mercy of Santander's SVR? What would you do right now?

kingstreet

You are unlikely to have sufficient equity to remortgage onto a formal buy to let product. Although that may be worth researching with a broker.

I assume Santander will not give you a residential customer retention product while the property is let?

LisaV

Thanks kingstreet

To be honest I didn't think there would be any other options with Santander - they have been so rubbish I haven't contacted them for a couple of years! what type of products might be available / should I ask for?

kingstreet

As I said, you have a residential mortgage, so you would normally have customer retention product options. However, as the property is let, Santander may be unwilling to offer you anything.

Your other option is to remortgage to a formal BTL product with a new lender, but that will be subject to loan to value, rental income etc.

Thrugelmir

LisaV wrote: »

I am renting it out for £130/month less than I pay on the mortgage (ie I am supplementing the mortgage by £130/month plus other costs of keeping the property in rentable condition etc)

Is your mortgage interest only or repayment?

TBagpuss

Are you expecting to move back in the foreseeable future? If not, have you considered selling, and using your 20% equity plus the £130 each month you'd save to put towards a deposit on a property you could live in?