Permission to let - stuck with rate

firely2327

Hello forumites


I currently have a mortgage and am buying a second property to which I will move to immediately and want to keep the current property as I hope to move back to the area in the future. I've queried this with my current provider and they see no issue. They'll allow me a 'permission to let' on my current property. However, once a permission to let is granted I'm told that's it in terms of interest rate, I will not be able to change the deal on the mortgage/remortgage in future, even after the expiry of the initial period (here I have an option of 2 or 5 years).




I'm just wondering if this is the case with all banks or just my current provider? I can't find anything online that covers this scenario. I do intend on moving back to the property in the future, but I expect it will be a few years.


Thanks for any helpful advice.

minimike2

Pretty standard. The expectation is that after the rate ends you move it to a BTL product.

firely2327

minimike2 wrote: »

Pretty standard. The expectation is that after the rate ends you move it to a BTL product.

Oh, I didn't realise that was an option, the mortgage advisor didn't mention it. I thought it was a case of staying with the permission to let and the high interest rate, or just selling up, as that's the impression he gave.


At present my current fixed rate is coming to an end so I can remortgage as a residential mortgage, fixing for 2 or 5 years, and then immediately apply for permission to let which I'm told I'll be granted.


Thanks for your suggestion.

kingstreet

firely2327 wrote: »

Oh, I didn't realise that was an option, the mortgage advisor didn't mention it.

It's an option if the loan to value and rental income level justify it.

Dingo12

I think you will find it depends on the lender. Not all lenders will allow you to switch from an owner occupier mortgage to a buy to let - Virgin Money is one such example. Furthermore Virgin Money will not allow you to take a new deal while on consent to let, and so you're correct that you would be stuck on the SVR, unless you could refinance with another lender on a conventional buy to let mortgage. BTL mortgages typically come with higher interest rates and additional fees. Keep this in mind and check on your lender's policy.

BobQ

Financial institutions cannot stop you redeeming the full current mortgage by taking out another mortgage. They can refuse to provide you with an alternative mortgage.

Most firms will not let you take out a mortgage on a house you are letting to tenants unless its a BTL mortgage. But one might allow it if you have clear plans to return to the house in a fixed period (eg you are seconded to somewhere for a defined period).

To have any mortgage you need to meet the loan criteria they laydown, for buy to let it is more restrictive than a residential mortgage.