Have a mortgage but want to rent house out

dendes

Hello,

I'm after some advice about renting my house out please.

I want to rent the house and move in with my elderly mother. I have a mortgage of 95k. When I inform my mortgage provider that I'm planning on renting my house out, will they charge me more and put me on a different mortgage?

If they are, is there a way of my mother using £50k of savings and me using £45k of my savings to pay the mortgage off and I pay her back without getting hit with any tax?

Sorry if these are stupid questions.

Thanks in advance.

HappyMJ

dendes wrote: »

Hello,

I'm after some advice about renting my house out please.

I want to rent the house and move in with my elderly mother. I have a mortgage of 95k. When I inform my mortgage provider that I'm planning on renting my house out, will they charge me more and put me on a different mortgage?

If they are, is there a way of my mother using £50k of savings and me using £45k of my savings to pay the mortgage off and I pay her back without getting hit with any tax?

Sorry if these are stupid questions.

Thanks in advance.

Possibly. You would need to ask your mortgage provider.

Hit with tax? You won't have the expense of mortgage interest so you will have more tax to pay as you will have more profit. I can't see any way of avoiding that if you use savings to clear the mortgage.

dendes

HappyMJ wrote: »

Possibly. You would need to ask your mortgage provider.

Hit with tax? You won't have the expense of mortgage interest so you will have more tax to pay as you will have more profit. I can't see any way of avoiding that if you use savings to clear the mortgage.

Thanks for your reply.

So I wouldn't get taxed on my mother lending me £50k to pay off the mortgage?

HappyMJ

dendes wrote: »

Thanks for your reply.

So I wouldn't get taxed on my mother lending me £50k to pay off the mortgage?

That bit no you won't be. You didn't earn the money it will be given to you as a gift. There is no tax on gifts. You'll give it back at some point but there's still no tax to pay. As long as there is no interest charged like a normal loan agreement from a bank then your mother won't have any tax to pay either when you give her back the amount she gave you.

kim_smith

Maybe you can do the second one. But just talk with your mortgage provider & then take any decision.

dendes

I read online that some providers don't change the rate as I'm not buying another property or getting another loan, so with a bit of luck I won't need to loan from my mother and keep my current rate of 1.59% and rent the house out.

Does anyone know how I'll be taxed on the rental income as a basic rate tax payer?

dimbo61

" When I inform my mortgage provider that I'm planning on renting my house out, will they charge me more and put me on a different mortgage? "

You can "ASK" your lender for Permission to let out your property and they may say YES or NO that is up to them.
If they say NO then you have to sell the property or pay off the mortgage or remortgage to a BTL lender

booksurr

dendes wrote: »

I read online that some providers don't change the rate as I'm not buying another property or getting another loan, so with a bit of luck I won't need to loan from my mother and keep my current rate of 1.59% and rent the house out.

providers have their own rules, you won't know how they will treat you until you ask. Consent to Let with no/some fees, rate static or increased and/or no/restricted time limits. Imposed conversion to BTL mortgage

dendes wrote: »

Does anyone know how I'll be taxed on the rental income as a basic rate tax payer?

I assume you can use google? if not here is a starter https://www.gov.uk/renting-out-a-property/paying-tax

dendes

booksurr wrote: »

providers have their own rules, you won't know how they will treat you until you ask. Consent to Let with no/some fees, rate static or increased and/or no/restricted time limits. Imposed conversion to BTL mortgage

I assume you can use google? if not here is a starter https://www.gov.uk/renting-out-a-property/paying-tax

Thank you for your reply. More tax!! As if I don't pay enough

Pete9501

However, there is a sting. Should your elderly mother need to go into a nursing home in the future, then the gift of £50k may be taken into account as an attempt to hide the asset.

Pete

Slovell3003

I had to move away for work temporarily, and I called my provider (Halifax) and said I was thinking of renting out but wanted house available after I came back. Would it be ok, got a yes and happy days that was me. Maybe worth some careful wording?