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Extra mortgage interest charge for letting a property.
Doby
Posts: 2 Newbie
We have had an interest only mortgage with C&G since 2008 and lived there until Jan 2021. We have since rented the property for over 2 years. Each year we have to apply for permission from C&G to be able to continue the rental. Within in the C&G extra charges there is a one charge for renting a property of £225 at the discretion of the lender. To date we have not been given this charge, and if the list of extra charges changes we will be notified. We have not been sent any update to these charges.
However, we have been sent a letter. This letter states to make this process more convenient C&G are doing away with this application process, but are from Oct 2023 adding 0.5% interest to our monthly mortgage payment.
My question to the forum is, can they do this?
However, we have been sent a letter. This letter states to make this process more convenient C&G are doing away with this application process, but are from Oct 2023 adding 0.5% interest to our monthly mortgage payment.
My question to the forum is, can they do this?
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Comments
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Doby said:My question to the forum is, can they do this?Would October 23 be the next point where you would be applying for permission again under the old system?If so then yes, I don't see why they wouldn't be able to do that as 'permission to let' is discretionary on a residential mortgage...2
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I would imagine yes they could - but I'm sure there are mortgage experts that will know more than me. There's a perceived increase in risk if the homeowner isn't living at the property, and is renting it out, so imagine that'll be reflected in the rates offered. It's my understanding that buy to let mortgages tend to be slightly higher in rate than a residential. Tenants have also been known not to care as much for a rented property properly as an owner would - so considering you are on a residential mortgage, it's good of them to allow it to continue indefinitely. Do you have plans to return soon? Or is this now to be a permanent arrangement for as long as you can get away with it on your existing mortgage?
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Yes they can. Allowing you to let the property if it is on a residential mortgage agreement is already a concession.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
To all those have kindly responded thank you for your input and knowledge. We asked the question because we want to understand our position and your responses make sense. Let's home the rates drop a tad towards the end of the year (they may well go up again later today).
In answer to a question, yes our next application date is October 2023.1
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