Buy to Let requirements

Monica_4

Hello,

I’ve just read something in the home section of the forum and it left me confused.

Can you have a buy to let mortgage on a rental property if the home you live in is not owned/mortgaged by yourself?

Many thanks for any help!

K_S

@monica_4 The short answer to your question is yes, but it depends on the lender. Most BTL lenders require the applicant to be an owner-occupier but there are enough that don't have such a requirement.

Monica_4 said:

Hello,

I’ve just read something in the home section of the forum and it left me confused.

Can you have a buy to let mortgage on a rental property if the home you live in is not owned/mortgaged by yourself?

Many thanks for any help!

Monica_4

Thank you for replying so quickly!

Do the lenders who don’t require the applicant to be an owner/occupier charge a higher interest rate or are they standard lenders?

housebuyer143

Monica_4 said:

Thank you for replying so quickly!

Do the lenders who don’t require the applicant to be an owner/occupier charge a higher interest rate or are they standard lenders?

There are standard lenders who do not require it and non standard. There is no hard and fast rule that only the more expensive ones don't require owner occupier status. 

jimjames

I can understand some situations where having a BTL and not owning your own property might be an option but in most circumstances it would probably make sense to own the house you live in rather than renting which is why many lenders don't allow it. 

Monica_4

jimjames said:

I can understand some situations where having a BTL and not owning your own property might be an option but in most circumstances it would probably make sense to own the house you live in rather than renting which is why many lenders don't allow it. 

I fully appreciate what you are saying.

The situation can happen when 2 people with individual mortgages choose to live together in one home and rent out the other.

MissMoneyManager

Monica_4 said:

jimjames said:

I can understand some situations where having a BTL and not owning your own property might be an option but in most circumstances it would probably make sense to own the house you live in rather than renting which is why many lenders don't allow it. 

I fully appreciate what you are saying.

The situation can happen when 2 people with individual mortgages choose to live together in one home and rent out the other.

I was in this exact situation and it was fine.  I would recommend using a broker as they know which mortgage providers will lend in this situation. I ended up with a BTL mortgage with Skipton at a competitive rate.

MissMoneyManager

Another thought which may not be relevant to you is that when I found myself in this situation I had a fixed residential mortgage with Nationwide and I asked for consent to let which meant keeping the same mortgage but the interest rate increasing by 1%.  I think this is pretty standard for mainstream lenders. This was when interest rates were low so I then decided to remortgage with a BTL mortgage to reduce the rate. However with the increasing interest rates now paying 1% extra on your current rate if it's fixed could work out as a lower rate than if you were to remortgage as a BTL at the current rates. I hope that makes sense.

kingstreet

When you don't own your own home, a lender will typically test affordability for a BTL mortgage using residential rules as well to ensure "scheme abuse" isn't likely.

IE - if you can afford it as a residential you are unlikely to want to apply for a BTL mortgage if you plan to live in it yourself.