Lender refuses to change mortgage during consent to let period

darrinm81

We recently rented out our main residence. We attained consent to let from the mortgage provider.

The mortgage has now changed from fixed rate to variable rate (fixed rate term had ended). I submitted a request to change (remortgage) back to a fixed rate mortgage but this was refused. The reason was that they cannot remortgage during the consent to let period.

When I queried this prior to attaining the consent to let - they stated I could change the rate at the end of the fixed period.

Where do I stand? Obviously being locked into a variable rate is now costing us...

I have read through the standard terms but cannot find anything explicit on this scenario.

getmore4less

darrinm81 wrote: »

When I queried this prior to attaining the consent to let - they stated I could change the rate at the end of the fixed period.

You did get it in writing?

Go back to them with that evidence.

if not you will have to get them to listen to the recordings.

amnblog

Consent to let is a concession on what should be a residential contract. Lenders will generally not offer new terms.


If you don't like what you have you will need to re-mortgage to a buy to let contract.

darrinm81

The purpose of our consent to let is because we have temporarily relocated. We could remortgage to a 'buy to let' but would then need to remortgage when we return.

I just want to know why the lender does not publicly document these terms. It appears to be internal policy that is not consistently communicated to customers.

It doesn't feel completely transparent.

amnblog

They are not 'terms' because consent to let is a concession outside terms and therefore not documented. Under the 'terms' you should not be letting the property out.

ACG

As amn says, according to their actual terms they could have declined your request to let the property out and called in the loan if you had gone against that.

In order to switch product it appears that you need to be sticking to the actual terms of the mortgage, which at the moment you are not (albeit with consent from the lender). It is pretty standard that lenders offering CTL would not allow you to switch products whilst the property is let.

davidmcn

darrinm81 wrote: »

It doesn't feel completely transparent.

It doesn't need to be transparent.

And generally, no lender will promise that at some point in the future they'll offer you a new mortgage - it's always going to be a decision they make at the time (see umpteen previous threads here about "porting"). At best they might have told you what their policy was at the time you asked.

ACG

davidmcn wrote: »

It doesn't need to be transparent.

And generally, no lender will promise that at some point in the future they'll offer you a new mortgage - it's always going to be a decision they make at the time (see umpteen previous threads here about "porting"). At best they might have told you what their policy was at the time you asked.

I would not go as far as this post to say you are wrong as I was not party to the conversation. However I remember doing some training when I worked for a bank and it was basically saying people hear what they want to hear. So someone for instance saying we may be able to switch products is not the same as we WILL be able to switch products.

If the calls get listened to and the original person you spoke to did say the wrong thing, at best they will probably give you £50-100 compensation as a good will gesture. They are not going to witch you to a new product. You are not out of pocket by their "mistake" as you would probably not have left them anyway as there would have been ERCs and by the sounds of it you are not going to leave them now as getting a BTL is not worth it?

Thrugelmir

darrinm81 wrote: »

I just want to know why the lender does not publicly document these terms. It appears to be internal policy that is not consistently communicated to customers.

It doesn't feel completely transparent.

If you read your mortgage contract then the granting of consent to let is both at the discretion and the on terms set by the lender.

In addition CTL carries a premium to normal mortgage rates. Sounds as if your lender is simply using SVR as the going rate rather than adding a 1% point above a given product rate.