Consent to let residential mortgage (5 yr fixed), can I take out equity in the future to buy home

rosa246are

Hi Everyone, 
I wanted to get advice.  The story is I have a mortgage 5 year fixed which is due to end October 2026 (residential mortgage). I want to leave the town and the location due to personal circumstances/ finance issues. I have built up quite a bit of equity in the house (bought the property in 2020) 

 I have looked into consent to let (nationwide) and essentially could do this till October 2026 (i recognise it will be higher interest rate).

My question is if I find a property I want to buy (during this consent to let period) say I find a property for myself in Feb 2026,  can I take out equity from this property (nationwide mortgage which is currently on this consent to let scheme)  end the consent to let, convert to BTL to help with the on going purchase (that I will live in) or do I have to wait until October 2026 when the fixed term ends?

Hope this makes sense 

Any advice or signposting I will really appreciate 


Thank you for reading 

Regards, 
Rosie

Van_Girl

Why do you want to let it? Can't you just sell it and port your mortgage to a new property?

silvercar

Essentially you would be redeeming the current mortgage and taking out a new BTL mortgage, for the amount you want, on the current property. You need to look at any early redemption penalties, if you redeem before October 26.

Are you considering also taking a mortgage on the property you intend living in? It may be easier to do this as a straight forward residential mortgage and then convert the current mortgage to a BTL mortgage in October 2026.

Remember that you will pay additional stamp duty as you are increasing the number of properties you own.

user1977

You can remortgage to BTL if you want, you'll just need to pay whatever early redemption penalty there is.

rosa246are

Van_Girl said:

Why do you want to let it? Can't you just sell it and port your mortgage to a new property?

Hi 
Essentially I do not have a place I want to buy yet...so i cant port or use equity right now.  I want to buy a home for myself next year march-june or so.  For now I am planning to rent someplace cheap and save deposit and do some travelling 

rosa246are

user1977 said:

You can remortgage to BTL if you want, you'll just need to pay whatever early redemption penalty there is.

can i take out equity from the property after converting to BTL and use the equity to purchase my own home (march-june) next year?

rosa246are

HI everyone, I didnt mention.  I just do not want to live in this property due to personal circumstances.  i am planning to move out and live elsewhere and travel etc.  So at current I do not plan to purchase a  home (I am planning to buy a home for myself 2026 (march-june).  So during march-june, can i take out equity towards this new purchase whilst this nationwide morgage is BTL/Consent to let. I have looked at re-morgage but the intrest rate is quite high,  consent to let has lower interest rate 

I am sorry if this sounds like silly question, I have looked online for explanation of this process but wanted to get advice 

user1977

rosa246are said:

user1977 said:

You can remortgage to BTL if you want, you'll just need to pay whatever early redemption penalty there is.

can i take out equity from the property after converting to BTL and use the equity to purchase my own home (march-june) next year?

Are you saying you want to remortgage now, but not have the additional money advanced to you until later? I was assuming you just wanted to do it all simultaneously?

Van_Girl

rosa246are said:

Van_Girl said:

Why do you want to let it? Can't you just sell it and port your mortgage to a new property?

Hi 
Essentially I do not have a place I want to buy yet...so i cant port or use equity right now.  I want to buy a home for myself next year march-june or so.  For now I am planning to rent someplace cheap and save deposit and do some travelling 

Thanks for clarifying. I understand why you want to do it, but since it's such a short period of time until you want to buy a new home, it seems like an odd decision to add the extra stamp duty you'll have to pay due to having two properties.

It's also worth thinking about whether you actually want to be a landlord, as it's really not an easy job and can go very wrong very quickly (non paying tenants, tenants damaging property etc). 

silvercar

You can take out equity if the rental income is sufficient to justify it and the loan to value is within the lenders limit. It would make far more sense to do it at the same time as you buy. You should also consider taking the largest mortgage possible on the property that will be your home as the interest rate will be lower.

rosa246are

Van_Girl said:

rosa246are said:

Van_Girl said:

Why do you want to let it? Can't you just sell it and port your mortgage to a new property?

Hi 
Essentially I do not have a place I want to buy yet...so i cant port or use equity right now.  I want to buy a home for myself next year march-june or so.  For now I am planning to rent someplace cheap and save deposit and do some travelling 

Thanks for clarifying. I understand why you want to do it, but since it's such a short period of time until you want to buy a new home, it seems like an odd decision to add the extra stamp duty you'll have to pay due to having two properties.

It's also worth thinking about whether you actually want to be a landlord, as it's really not an easy job and can go very wrong very quickly (non paying tenants, tenants damaging property etc). 

Hi Van Girl,  Yes I understand I will have to be landlord after this process is complete- which I will have to do lots of research on.   But for now....I am quite low emotionally really living in this town, in the home I am not coping well hence the reason why I just want to start this process of moving out ...I cant imagine living here till October 2026.  I am trying to find the best way possible/ financially efficient way. 

 I will take on board those thoughts though and have a good think about it