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Original poster

Residential mortgage - do you disclose if you move and rent it out?

21 replies

maggiethecat · 04/01/2011 23:05

Am with ING direct and am obliged to disclose if we no longer reside in property. I believe that they can increase interest rate if we move and rent it out but it's not very clear what the increase would be (not contained in agreement and since they do not do buy to let mortgages I cannot presume the rate).

Has anyone disclosed to their lender in similar circumstances and how have the payments changed.

OP posts:
ChippingIn · 04/01/2011 23:08

Maggie - sorry I don't know, but I'd be keen to hear the answers - I'm with RBS.

madrush · 04/01/2011 23:10

Yes, don't think it went up by much but was some years ago now. Fortunately we weren't tied in so could look around again for buytolet lender, sounds like you might be tied?

I think you must disclose (although I can't for now imagine what the consequences might be if you didn't - I suppose they could force you to sell the property to repay their loan if they find out you've broken the agreement)

And would you be insured if you hadn't told them, is your buildings insurance tied? You definitely need to let your insurance company know or you won't be covered.

Hullygully · 04/01/2011 23:10

Only tell them if you want lots of ag.

madrush · 04/01/2011 23:12

If ING don't do buy to let, they probably have another part of the same business that does.

LacksDaisies · 04/01/2011 23:13

We bought a new house and rented out the other one. We let the mortgage lender know and they were happy for this to happen and IIRC there was no change to the interest rate on the loan Also as we were only covering buildings insurance, not buildings and contents, and although the buildings insurance increased due to the property being rented out, overall we paid less.

LoopyLoopsOfSparklyFairyLights · 04/01/2011 23:14

Yes.

LoopyLoopsOfSparklyFairyLights · 04/01/2011 23:15

Sorry. Yes, told them, and went up by very little (a few pounds).

LacksDaisies · 04/01/2011 23:18

Not telling them is a bit risky hullygully, as if there is a fire or whatever it could negate your buildings insurance depending on the small print of the policy.

I'm not sure how it would place you legally either with respect to the terms and conditions of the loan. You could arguably be sued for breach of the loan agreement resulting in losing the house.

Why not just call and ask? You could say you were a potential new customer rather than disclosing your account details?

WhyHavePets · 04/01/2011 23:22

Can you afford to pay the full loan back immediatly if they find out/you are "told on" by someone?

My understanding is that breach of contract like this can lead to foreclosure. Personally I couldn't so would lose my house.

Original poster
maggiethecat · 04/01/2011 23:33

I disclosed with another lender (C&G) when we moved out of our flat and we went onto the BTL rate, meant significant increase.

I will disclose if we do move but will try to ascertain what the increase will be. Lacksdaisies, will call as spec customer to try to find out.

OP posts:
Cazzr · 05/01/2011 15:01

I believe you could try to get 'consent to let' depending on your LTV, i think for instance if the house is failing to sell in this fun market for instance. If you are currently in a 'deal' you would probably stay on the same deal but maybe pay an admin fee.

Money saving expert forums are handy for this kind of info (assume I won't get in trouble for mentioning another forum...).

I also think it's classed as fraud if you DON'T tell them...

Rugbylovingmum · 05/01/2011 15:22

We haven't told our lender as we are on a very good lifetime tracker mortgage rate and changing it would lead to a significant hike in our payments. We asked about a 'global agreement to let' but it sounded as though we would have to move over to a buy-to-let mortgage after a year and that would be much more expensive. We have spoken to friends working at several banks who have said that the mortgage dept don't really care what we do as long as the payments are made (they did advise us to get our landlord insurance from a different bank though so we don't make it too obvious). We are aware we are taking a risk though and once interest rates go back up, and our payments increase we will let our lenders know we don't live there and are renting it out.

PDR · 09/01/2011 19:47

I echo that if you do not tell them your buildings insurance will be void and presumably your landlord's insurance as well so if anything were to happen you would be liable. Agree that this is very unlikely but not worth the risk IMO.

We informed our lender and they agreed for us to let the property for the remainder of the term (3/4 yrs interest only) without increasing our rate or switching to BTL. We did have to pay an "admin fee" of £120 IIRC (C&G).

Gonzo33 · 13/01/2011 10:27

I rent my home out. My mortgage is with HSBC and is a residential mortgage. I have rentes the property for two years as my husband is in the armed forces and we need to move due to his postings.

When I informed HSBC they did not increase my rate (they do not do BTL mortgage for the average customer).

My LTV is 33%.

Please tell your mortgage company that you are letting the property or you could have issues as per PDR's post.

Original poster
maggiethecat · 14/01/2011 10:21

Was trying to gauge what to expect but will definitely tell them.

OP posts:
JDabhi · 11/01/2012 14:45

Hi Maggie,

Did ING grant u consent to let?

PrincessWellington · 11/01/2012 22:48

I'm with Halifax. Told them, sent me a form and no changes in payments during tied in period

iamstupid · 11/01/2012 23:00

Same as Gonzo33. Im with HSBC, was living in my house then moved in with DP. They don't do a Buy to Let, so they left me on my discount rate and when that ended, transferred onto the standard variable rate - much cheaper than BTL with other lenders.

They sent a letter confirming permission to let.

You do need landlord insurance and this is a tax deductable expense.

You need to tell them as if you dont and your house burns down etc, you're not covered.

choccybiccie · 13/01/2012 10:24

We were with Skipton and told them, because whilst it's annoying, we calculated it would be worse not to tell them & the agro that would result from being found out.

There was a £100 "administration fee" just for applying (way above actual costs in my view) and the interest rate went up 1% if LTV was above 80%, and 0.5% if LTV below 80%. For us it meant about £100 increase each month.

When we ceased letting, we made sure we were very precise in telling them exactly when it ceased and made sure they calculated the change in monthly payments back to the original amount.

They state that for unauthorised lettings the interest rate will be 1.5% pr 2.0 depending on LTV.

These conditions are set out in their up-to-date Tariff of Charges (current mortgage charges explained) - most firms will send you one of these leaflets if you ask or can pick up up in store/bank.

CUSP17 · 18/08/2017 10:10

Hi Everyone
Does anybody recently applied to HSBC for consent letter to let the residential property ?

What is there criteria now to provide Consent to let?

Read some earlier posts from ianstupid and Gonzo33 when in 2011-12 both had been given for consent to let their homes without any problems from HSBC?

What could be possibility now a days if I want to apply for consent to let from HSBC?

Pls advice

Thanks

5rivers7hills · 20/08/2017 11:43

I disclosed. I think it is really risk NOT to.

I had 6 months grace period on the same rate then they bumped it up by 0.5% or something.

Then when my fixed term came to an end I remortgaged onto a BTL mortgage.

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