Avoiding redemption penalty so we can emigrate?

flanajb

We stupidly took out a 5 year fixed rate mortgage with Chelsea Building Society 3.5 years ago. The product has a 4% early exit fee which equates to 10k :-(

Now the Wife and I have decided that we will be foolish to not make use of our permanent Aussie visa which expires April 2015.

Plan is not to sell the house as we are going to go and give it a go for 2 years, so we intend to rent.

One half of me is thinking 'just rent the house out and don't tell robbing mortgage provider', the other is thinking call them to see whether switching to a buy to let will mean we don't get clobbered for the early exit fee. My only concern is that once I have made that phone call, they will no what we are up to if they say no.

If we pay the 10k exit, we won't have the money to go as we only have 20k saved for getting out there.

Thanks

HappyMJ

You could if you are keeping the property remortgage onto a BTL including the exit fee into the equation. So if you owe £250,000 (4% being £10k) you just add £10k onto that when remortgaging and remortgage for £260,000 plus any other fees and charges so you can keep your £20k.

and the word is let. Renters rent. Landlords let.

ACG

You can ask for consent to let - YBS/Chelsea i think would load your interest rate by 1% - although they may not do it whilst your in a fixed rate.

Speak to them and see what they say.

Just ask generically if you like without giving any details.

anselld

Not really fair to call them a robbing provider as that is exactly what you signed up for. However, it is relatively low risk to not tell them provided you ensure the rest of your LL responsibilities are taken seriously and payments are maintained on schedule.

Thrugelmir

flanajb wrote: »

If we pay the 10k exit, we won't have the money to go as we only have 20k saved for getting out there.

Is letting a viable option? Sounds like you've little to no equity in the property.

mrginge

flanajb wrote: »

.

One half of me is thinking 'just rent the house out and don't tell robbing mortgage provider'

Thanks

Will you be telling the taxman about your new business venture or are you going to rob them (sorry us) too?

kidmugsy

anselld wrote: »

Not really fair to call them a robbing provider

You might very well say "not really fair": I'd say it's the sort of stupid and dishonest excuse used by someone who is considering being a crook. Fine old Australian tradition, I suppose.

BillJones

flanajb wrote: »

One half of me is thinking 'just rent the house out and don't tell robbing mortgage provider'

As above, it's refreshing to see someone planning the crime and the deportation in parallel.

I do have to wonder, though, what is it that the mortgage provider is doing to rob you? I assume that it's more than sticking to the terms that you accepted when you asked them for the money, isn't it?

Edited to add, OP has had posts here and elsewhere claiming that they are going to refuse to pay tax, for a variety of ridiculous reasons. Seems that they believe that they simply get to walk away from any situation if they decide that they don't like it.
OP, you said that you were willing to take a custodial sentence rather than pay your benefit in kind tax, will this not affect your visa?

dimbo61

You simply need to ask for consent to let.
OZ is a very very expensive country to buy property so you will end up renting unless you have a great job lined up or a big bag of money :-)

flanajb

mrginge wrote: »

Will you be telling the taxman about your new business venture or are you going to rob them (sorry us) too?

There won't be any tax to pay. (Mortgage payments + Agent Fees) - Rental Amount = £0

Of course I will tell HMRC. I suspect you have already rang the hotline

anselld

flanajb wrote: »

There won't be any tax to pay. (Mortgage payments + Agent Fees) - Rental Amount = £0

Of course I will tell HMRC. I suspect you have already rang the hotline

You better do some more reading ....
http://www.hmrc.gov.uk/international/nr-landlords.htm


PS. Only the interest element of the mortgage payment is deductible.