Renting my flat during fixed term mortgage - pls help!

djginge

I've been on a 5 year fixed term mortgage which finishes in a couple of weeks.

I plan to stay on my Mortgage lender's SVR for as short as possible but I have a few questions that people here might be able to help me with.

Here's the background:

- I'm planning to Move to Spain in 2011 and keep my current UK property. (I have no concerns about Spanish property in this post)

- I want a 5-year fixed term mortgage if I can get one (on a 10-year total mortgage lifetime).

- I plan to rent my property after the first 3 years of my fixed term (when I move to Spain).

So my questions are as follows:

- When I move to Spain in 3 years, will a mortgage lender still allow me to stay on their preferential rate for the remainder of the 5 years fixed rate I signed up to or are they going to force me to switch to some kind of 'buy to let' mortgage when I start renting it?

- I will realistically be able to get around £800 / month in rent for the property. I work and my salary means that I'm a higher-rate tax payer - will this mean that 40% of this rent money goes straight to the tax man? If so, can my wife pay tax on it instead? (My wife also works but earns less than me though she still is taxed around 30% or 35% over the course of a year)

- At the end of the next 5 year fixed term, I plan to have saved enough money to pay the remainder of the property. Can the mortgage lender charge me any fees to do this (after the fixed term is finished) - ie will they want some compensation for the fact that I signed up to a 10-year total mortgage but I'm finishing after just the 5 year fixed term?

Thanks for any and all help.

Bargain_Rzl

Just a point of clarification - when you say fixed term, I'm guessing you mean fixed rate...

zebedy

- When I move to Spain in 3 years, will a mortgage lender still allow me to stay on their preferential rate for the remainder of the 5 years fixed rate I signed up to or are they going to force me to switch to some kind of 'buy to let' mortgage when I start renting it?

Entirely depends on your mortgage provider. I planned to rent out my flat for a year while I was abroad and my mortgage lender was Halifax and i was on a 2 year fixed rate deal. I went to them to ask for "Consent to Let" but they said they could grant it for a £150 fee but it would change my rate to equivalent to a buy to let rate which made it not worthwhile to rent out (ie the rent would not cover the mortgage payments).

however other mortgage lenders don't make you change rate when you do a consent to let.

Worth phoning them up and saying you are considering asking for a Consent to Let and want to find out the admin charge and whether it changes your rate etc. Then you can find out the exact details from your provider and make an informed decision.

hope it works out for you