Can we rent our house?

[Maybenexttime08]

Hi,

Hoping someone might have had this situation and can help!

We want to rent out our house so we can rent somewhere bigger.

What is the chances of our mortgage company letting us do this without great cost??

I will give them a call tomorrow but would love to hear experiences!

There is a clause in mine that says I can do it 6 months after the start of the mortgage without asking for permission

Check yours

They might increase your mortgage rate. They did this to my son.

It depends on your lender. Reading your mortgage deed/T&Cs is a good place to start. If you used a broker you could ask them. Our broker advised us a few years back before we approached our lender (thereby putting them on notice). He said some are stricter than others...ours wanted a nominal fee and a review/extra fee annually. I’ve heard some may even try to put you on a buy to let mortgage too.

I think you contact the mortgage company and ask for a consent to let. As far as I am aware there shouldn’t be any cost associated to this, but I might be wrong?

It often depends how much you’ve got left to pay.
Most BTL mortgages are a minimum of 25% deposit.
The fee will be a good few hundred pounds.

Also is the property up to being rented. Is the EPC in date, do you have an EIRC, PAT cert, gas safety cert, do the fire alarms meet regulations?
Have you got a good local agent (ie not purple pricks or countrywide) to give you a realistic value/desirability. Want people look for when renting is often different when buying.

Try and find out the answer yourself, before calling bank and putting them on notice (as a pp said).

It entirely depends on your LTV, the bank, and the type of property (e.g. You're almost never allowed to rent shared ownership properties).

If you're on a variable rate, or near the end of your fix, the bank will likely ask you to apply for a BTL. these are more expensive than normal mortgages.

If you're e.g. 2 yrs into a fixed deal many banks will grant a Consent to Let for the remainder of the fix, but some will charge a fee and/or extra interest for the duration.

Natwest for example charges an extra 1.5% (!!!) Others ask for only a £100 admin fee and away you go.

Thanks so much everyone. We're 2 years into a 5 yr fixed, hence why best for us to rent out than sell (as we wouldn't be able to port the mortgage).

I will try and speak to them today, with confidence, asking for a provisional consent to let. If we get this then I will ensure all other paper work is in place!

Why don’t you check the terms of your mortgage BEFORE you call them?

Are you sure the mortgage is not portable under any circumstances?

Also bear in mind that most BTL mortgages insist that the rental income is 125% of the mortgage. So you have to find out how much your house would rent for & do the maths.

I did my research before calling them and yes, we can get a consent to let for £225 a year for up to 2 years.

We will then be in a better position with our mortgage. We did check if we could port it and we can't so there is a heavy redemption fee if we were to sell now.

Seems like I've got my answers - thanks everyone!

Oh, and my mortgage company insists I appoint an agent to manage it on a certain type of tenancy agreement - so no cutting costs trying to be a self-managing LL!