Permission to let on re-mortgage fix

mack83

We are coming up to the end of our initial two year fix at 3.99% on a residential mortgage.
We are happy with a new five year fix at 1.99%, with the same mortgage provider.

However, we may be taking some time working abroad for a two or three years, and want the freedom to rent out our apartment.
We believe we can rent at least 25% above the new monthly repayment.
We will be renting abroad for this period, but do plan to return.

• Should we lock in the lower fix %, and then revisit "permission to let" when we are ready?
• Or, address up-front at the point of re-mortgage now?
  I expect the latter, but conscious I want to lock in a much lower % rate.
  
• What is the potential impact on %, or restrictions, that you commonly see from a "permission to let" arrangement?

glosoli

What would happen though if you signed up to a five year product, and then the consent to let request was subsequently declined, leaving you with hefty early repayment charges to obtain a buy to let product? Or if two years down the line, the consent to let expired, with 3 years remaining on the fixed deal, but you weren't quite ready to come home yet, meaning the property would have to remain vacant or again breaking the fix to convert to a buy to let?

YHM

2-3 years is quite a significant period of time to expect a residential lender to allow you to rent your property. You may struggle to get a consent to let for that period of time, as it is generally given in 6 - 12 month batches.

Interest rates have tightened between residential and BTL, so it may be worthwhile you just convert to BTL, LTV permitting. You can get 5 year BTL fixed at mid 2% nowadays.

tiz

Check your lenders consent to let terms, ours won't let us swap deal whilst on consent to let. However, you can't apply for BTL unless you are letting it out, if you aren't at that point you'll have to stay on residential until you are. If it's going to be sooner that a new fix would end you'll be stuck on the SVR in between. On the other hand if you sign up for a 5 yr fix there is no guarantee you'll get consent to let - won't hurt to ask your lender hypothetically what the likelihood would be but they won't guarantee.