Residential Mortgage being used for rental

graemec23

Three years ago my partner my partner got a mortgage for a new house.

In the meeting with the mortgage adviser, I said that we would like to keep our existing flat and rent it out. I asked what the process was. She said that if I called "the buy to let team" they would transfer it over at the current rate which was the standard variable rate.

The new mortgage was approved and to be honest I got the impression she couldn't really care less about us having two mortgages.

What with the stress off moving and due to the fact and that we had a baby the week we moved house I never got round to switching the old mortgage.

Things have gone along fine for the past 3 years but I have had this concern lately that I have residential mortgage being used for rental purposes.

We took a 5year fixed rate on the new property. (On the assumption that rates were certain to rise within that time- Which now looks like a bad decision) I'm starting to look at new mortgage deals. There are penalties on our current deal for early exit but I have looked around and it would appear I can get significantly better deals from other providers but the situation with the rental property has make me feel that I am locked it to my current bank.

My question is should I go to the bank and get it moved to a buy-to-let or just keep quiet.

My concern is that they (A)Bump up my mortgage considerably or worse (B) Call in the whole mortgage.

I know I'm in the wrong here(slap wrist) and I should have got this sorted initially, but I don't want to end up informing the bank and my honesty actually end up costing me money or forcing me to sell.

Thanks in advance for any advice/info

Playing_with_Fire_2

Does the lender offer consent to let for a residential mortgage? If they do you could get this arranged and then sort a BTL mortgage in a year or two.

MortgageMamma

I'm not judging but initially you may have been able to keep the same mortgage product, but obtain "consent to let" from the original mortgage lender. Trying to get this in hindsight could be awkward, as the lender may be a bit naffed off that you didn't do it initially, even though you had a lot going on. (I know what it's like I have 4 kids and moved a fortnight before the first one was born). When you bring a new baby into the house its hard to get basics done let alone lengthy phone calls.

However, if that original mortgage is now on standard variable rate it would be a good time to change it to a buy to let. You need advice from an experienced broker as the tenants already in situ. You also should get someone to do some research for you on your 2nd residential mortgage, even with early repayment charges you may be able to save yourself a bit of money.

Also now you have a family you should consider life and health insurance, if you've not already done it.

MM



MM