To remortgage and become buy-to-let or not?

TemmyTemjin

Hello folks,

I purchased a property in 2007, lived there for a few years, and since then haven't changed the mortgage. It's a repayment mortgage and the interest rate is currently at 4.74%. The current amount left on the mortgage in £63,000 and monthly repayments are £417.

A few years back I started to rent out the property (with the yearly permission of the lender).

I'm left wondering if I should re-mortgage. My assumption is if I do then it would have to be a buy-to-let mortgage given how the property is presently used and will be in the future. Could anyone please outline what benefits I'd get by doing this? What sort of expense might I expect in making such a change?

Many thanks!

dimbo61

Are you making money ?
Fees for setting up a buy to let mortgage are not cheap ?
Is your lender happy to keep the current arrangement ?
With the changes in Mortgage relief are you able to break even or make a profit ?
What are your long term plans ?

TemmyTemjin

HollySenna wrote: »

Do you have consent to let from your lender?
If you are remortgaging, you will need consent to let. If you do, then they should be happy for you to remortgage on to a better rate.
If you don't, then yes you'll need to remortgage as a buy to let - or claim naivety to your existing lender that you didn't know what CTL was - and request it.

Yes, I do have consent to let and it's been renewed every year since I've let the property out.

My real question here was trying to get a handle on how much the repayments would become / the costs involved. A very cursory search suggests if I was to move onto a buy-to-let, at the current LTV, I'd be looking at monthly repayments of £250'ish with arrangement fees anywhere between £500-2000+

In essence it could take me 10 or so months of savings on the repayments to make back the amount I spend on arranging the mortgage. Probably not a bad thing then considering the lower payments for a couple of years or so.

dimbo61

I take it the BTL is interest only ?
So already 10months just to cover the mortgage fee let alone the costs of a survey and legals.
What are your long term plans for the property ?
What condition is the property in ? Will it need a new boiler or roof or anything else which could effect profit ?
You talk about a £63,000 mortgage but how much is the property worth and is it jointly owned ?
So many questions that a good mortgage broker would ask as part of a full fact find along with your income, pensions, other savings, long term plans, age etc.
Could you pick a new deal with your current lender by going online and looking for new deals for existing customers ?