Changing mortgage to buy to let

Lnbrown22

Hi I bought my house 18months ago on a 95% mortgage.
I would now ideally like to rent this house to my parents and but a new one for myself and my partner to live in.
I have seen you can convert residential mortgages to buy to let but will there be charge for this and will I be able to buy another house straight away? How fesable is this as an option or am I being unrealistic? Any help and advice appreciated
Thank you

Caz3121

you would be looking at a 'regulated buy to let' as you would be renting to close family ...max LTV on these will vary but you will likely have to invest a lump sum to bring the LTV down (plus deposit for new property)
Do you really want to be a landlord? will parents be paying rent from savings? (unlikely to be able to claim housing benefit for the property)

Richard_Pia

What you would be looking for is 'consent to let' rather than actually converting to a BTL mortgage. This should enable you to keep your current residential rate, at least for the initial product period anyway. You would likely have to keep your same repayment basis, which I presume is capital & interest.

Who's your lender? Depending on who they are, they may charge a fee for processing a consent to let request and some may apply an interest rate 'loading' by, say, 1%. There is no guarantee that your consent to let application will be accepted however, and some lenders may have a concern with the high LTV.

The alternative is to actually transfer or remortgage to a BTL product, but most lenders would only offer up to 75% LTV, meaning you would have to pay off a significant portion of your mortgage.

As mentioned in above post, if letting to parents, the BTL mortgage then becomes 'regulated', and the majority of BTL lenders will not lend if they are aware of this situation. There could be some options, but it is likely the property would be treated more as a second home than a let property, and you would need to demonstrate enough income to cover both this mortgage and the new purchase one.