Mortage decisions

kopite_3

Hi, I have some decisions I have to make soon and any advice would be appreciated.

My situation is I own a leasehold flat with 65yrs left on the lease. I have a 75K mortgage on the property and I have to repay the deposit I borrowed off my parents which will be 50k. The value of the flat is approx £130-140k.
Its location is 15mins train journey from central London so it is in a rentable area. The 75k mortgage is fixed for 2 more years with HSBC. My annual income is 35k before tax

At the end of this year I plan to relocate to the northwest and buy a house up there.

What I am trying to work out is if it is possible to keep my flat on a buy to let and buy a new place and/or put the flat into a pension as I dont get one at present and the cost of living in London makes it difficult to afford the extra to pay into a private one. I also need to repay my parents.

HSBC said they would carry over the mortgage when I fixed it to a new place as I told them of the possibility of moving.

If any further info is needed let me know.

Thanks

Scott

You would have to inform your lender of your intention to rent out your property, as they have to give your permission. A big incentive for them in doing this is placing your property with a private letting firm, who will handle the placing of tenants, upkeep, etc for you, keeping the bank a bit happier that the property is being kept in good nick.

Banks can sometimes be nervous of doing this because tenants look after houses much worse than private owners, as they have little incentive to go through all the hassle of doing the little things.

Anyway, contacting your bank and asking them if this would be ok would be the first step, bearing in mind they will probably charge a fee (usually applied onto the account) for giving their permission in this way, and may require you to pay a higher rate of interest for doing so.