Selling House - Drop to Interest only Mortgage?

buckman

​We are currently selling our rental property which is empty.

With the ups downs and scaremongering of the Brexit etc, understandably we aren't sure how long this will be on the market.

Do we mention to the Mortgage Company (buy-to-let mortgage) that we are selling or not? (not sure what is best but just want to be honest)

And secondly would it be worth dropping to an interest only mortgage while its empty with no rental income, while its sitting on the market?

Thrugelmir

The lenders concern is only that you pay the mortgage every month.

Unusual to have a BTL mortgage on a repayment basis. If there's no rental income to offset the mortgage interest. You might as well continue to pay the full amount and reduce the amount you owe. Lenders won't simply alter the terms of your mortgage without a thorough review.

eddddy

It sounds like you're saying that you want to tell your mortgage lender that you're under financial stress.

I would try my best to avoid doing that, unless things were so bad that I was about to default on my mortgage. It will ring alarm bells, and be noted in their records.

I think I'd rather take a hit by selling a property cheaply and quickly, rather than risk damaging my standing with my bank - but others may think differently.

If you do change from 'repayment' to 'interest only', make sure it is treated as a product change, and not as an 'arrangement to pay' which would be recorded adversely on your credit file.