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Original poster

If I rent my house out do I need a BTL mortgage?

30 replies

MadameLeBean · 14/05/2015 21:50

Stupid question maybe .. If you only own 1 property but want to rent it out and live in another (rented) place, do you still need to change your mortgage to a Buy To Let one? Or is that only for second properties? What if my mortgage contract term isn't up yet? Thanks in advance oh wise and knowledgable mumsnet Smile

OP posts:
Miltonmaid · 14/05/2015 21:53

You need to get an agreement from your mortgage provider that you can let it out. Phone them and ask.

GaryBaldy · 14/05/2015 21:54

If you were buying a property to let then yes. But as Milton said you do need their consent - they may up it .5% or something

StupidBloodyKindle · 14/05/2015 21:59

Yep your mortgage lender must agree, and will sometimes transfer to a BTL or put a 1.5% load onto your repayments.
The rental income must be 150% of your repayments, you must let them know if it is ever empty for more than 30 days and you need landlord's insurance. They often will not let you rent out to students or dhss. You also need to make sure you put your tenant's deposit into the proper deposit schem and you need to pay tax on the rental income or do a tax return. Good luck Shamrock

specialsubject · 14/05/2015 22:07

and you need to do a gas safe certificate, make sure the property is to a reasonable standard, do a full inventory, reference tenants, make arrangements for fixes and maintenance, declare income for tax, insure against malicious damage and legal expenses and be able to cover the mortgage during periods of no tenant or non paying tenants.

but according to many on here, it is easy money. Angry

Stinkersmum · 14/05/2015 22:10

If you love your house at all, don't fucking do it. If you don't care too much about it, go ahead.

mandy214 · 14/05/2015 22:12

The rental income you need to generate depends on the lender, I've never seen it as high as 150% but rates may have changed.

fiveacres · 14/05/2015 22:14

Yes, you do need to inform the mortgage company and they will either change your mortgage to a BTL or they will just keep it as it is :) good luck.

Stinkersmum · 14/05/2015 22:18

StupidBloodyKindle I've never heard that. And it's certainly not true of our mortgage/rental income! The only stipulation our mortgage lender had was that the rent needed to be enough to cover our interest payments should we revert to interest only.

AuditAngel · 14/05/2015 22:32

The %cover of rent depends entirely on your mortgage lender.

HelenF350 · 14/05/2015 23:23

Op who is your current mortgage provider?

Original poster
MadameLeBean · 15/05/2015 06:59

Thanks for all the replies. Current provider is HSBC. But we are on a 2yr discounted deal which we can only get out of in April next year. So I was wondering if they will charge me a fee if they want to change it to BTL. And it seems opinion is split on whether they will change it to BTL at all. We have got a 45% LTV on a low rate, rental income I think will be about 1.5x mortgage payments but not if they put the rate up!

OP posts:
HelenF350 · 15/05/2015 13:37

Best thing to do is just give them a call and ask. You have plenty of equity so have a much better chance than a lot of people. I'm with nationwide and they gave me consent to let with only 22% equity (it is actually probably over 30% but their valuation is rubbish). I just pay an extra 1% interest after the first 6 months of letting. They didn't even ask me how much my rental income was.

CityDweller · 15/05/2015 18:02

Call and ask. We're with Santander, and they told me recently that they'd just issue a 'permission to let' with no change to our mortgage terms and didn't say anything about expected rental income. They even said we'd be able to reportage at the end of our current deal as if we were living in the flat (i.e. would't need to switch to a BTL at that point).

We also have a lot of equity in our place (about 35% LTV). If you want to release equity in order to raise a downpayment for another property then that's another matter. In our case, we would have to find a whole new mortgage deal for current property on a let-to-buy basis.

StupidBloodyKindle · 15/05/2015 18:09

Sorry for scaring you...we probably got screwed as ex pats. Certainly right now we are, as our 5 year fix with the 1.5%load came to an end, we were told no buy to let product available for us and are now on SVR.

Framboisier · 15/05/2015 18:17

Not all of them are terrible - our lender is First Direct and they will keep our current mortgage terms in place for 2 years if we wanted to rent out...

Just call and ask

Sunnyshores · 15/05/2015 18:18

this isnt a decision to be taken lightly, being a Landlord comes with many responsibilities and potentially has many pitfalls.

Fedupofallthemud · 15/05/2015 18:27

citydweller we're with Santander too and they told us that they don't do BTL mortgages so we are having to change lender!
Mind you the guy in our branch was a bit useless when we got the mortgage (took about 18 weeks to process it!!)

CityDweller · 15/05/2015 19:02

I don't think they do do BTL Fedup. If we wanted to do that (i.e. release equity from our property) we would have gone with another lender for a let-to-buy mortgage and just paid the early repayment fee with Santander.

Jackieharris · 15/05/2015 19:38

It's not a crime not to tell them.

The big risk is the place burns down and it invalidates your buildings insurance leaving you with a mortgage still to pay but no house to show for it.

With such a big ltv you are in a good position to do it by the book though.

specialsubject · 15/05/2015 19:51

..and there was a thread a while back where EXACTLY that had happened. The tenant was hospitalised, the house a ruin and the landlord's insurance was not valid because he/she had not told anyone that it was tenanted.

Sunnyshores · 15/05/2015 19:55

"Its not a crime not to tell them"....... actually it is mortgage fraud so is a crime and it would be bloody stupid.

Do this properly or not at all, BTL is a minefield, it needs effort, knowledge and hard work. Its not just your life at risk, tenants will depend on you. despite what people think, even then the money doesnt roll in.

Sunnyshores · 15/05/2015 19:57

crossed posts specialsubject - but hopefully the point has been made!

specialsubject · 15/05/2015 20:41

we can but try. Smile

'not a crime' - great attitude towards fraud, not!

soapboxqueen · 15/05/2015 20:54

Our mortgage is with alliance and Leicester (now pay off santander but treated separately) We just need to get permission annually which we pay £95 for. We are in negative equity. There have been no additional stipulations.

Fedupofallthemud · 15/05/2015 22:33

city I don't know why they didn't offer us the same permission to let.
This is our existing house which we can't sell and are therefore going to let. Santander are losing us as customers but luckily our mortgage doesn't have an ERC so at least we are not being stung with that too.