Mortgages and letting house

[BananaPie]

Not sure if this is best here or in the money section, but here goes... We may have to move away with work for a few years. We're in the fortunate position that dh's employer will pay for our accomodation where we're going, so if we let out our house, any income from the rent will be a bonus (rather than necessary to pay the mortgage). Our mortgage provider has told us that there'll be a bit of an extra charge to do this at the moment. But our product expires in a couple of years and we'll probably end up remortgaging while we're away - any advice on whether we would we have to get a buy to let mortgage in this situation?

It depends. Some lenders will not require you to do this if it is your main residence to which you will be returning - but that may be limited to Forces, diplomatic service and OGD families (it's a provision that pre-dated buy-to-let becoming widespread).

My residential mortgage is out of the deal term, but I have moved out and am continuing to let my flat on it - I just have to ask my provider permission every 12 months. At the moment, this is still cheaper than BTL options. If I were to take out a new mortgage, yup, it would probably need to be BTL.

Thanks, that's really helpful! And what about tax? Is it just the profits that are taxed, ie after deducting the amount we're paying for the mortgage?

taxable amount is rent minus INTEREST part of mortgage minus costs of renting out (which can be surprisingly large if you are careful !!!)

Ah, that makes sense, thanks. And it's taxed at normal income tax rates presumably? We own the property jointly, and dh is a higher rate tax payer (I'm nowhere near!) so would we have to split any profits equally and he'd be taxed at 40% on his bit and the other half taxed at 20? Cripes, it's complicated!

it would be worth you getting an accountant to look at it for you
(the cost would be deductible against the Schedule A letting income)
as there may be ways round that one
and with you being out of the country for a while there may be other exemptions you can take ....