The short answer is, ‘it depends’. The right answer will rely on a variety of factors.
Almost all, if not all, mortgage lenders will either prohibit you from letting your home to a third party or they’ll set restrictions and have formal requirements around notification, etc.
It’s always difficult to be specific on this subject because each lender and each mortgage will have its own terms relating to this renting out your home and associated issues.
However, in general terms, it’s unlikely that you will be able to let your home without at least first notifying your lender and revising your home insurance policy to allow for the new circumstances. Failure to do either could have serious repercussions.
For example, what if your home has a fire? If the property is not occupied by you and you’ve not notified the insurer, you may well not have the insurance you think you do!
Even if your mortgage lender agrees that you may rent out your home and grants “permission to let” perhaps temporarily, you are still likely to see some changes to the terms and conditions of your mortgage. In addition to revising or replacing your existing home insurance, it’s likely you’ll end up paying more interest too. Most lenders have a different rate for ‘buy to let mortgages’ and just because you originally bought to live won’t generally mean you will be paying the original interest rate from hereon.
Some lenders will simply not allow you to rent out your property. This is a more serious situation as it puts you in a difficult position legally and financially. Letting the property without permission or without notifying the lender may put you in breach of your mortgage and will almost certainly jeopardise your insurance policy.
If you need to change mortgage providers it’s important that you take advice ealy. Mortgage terms will vary as will the lending criteria and buy to let mortgages are different animals to the ‘bog standard’ home buyer’s loan.
Furthermore, there will be punitive tax considerations, especially if you and/or your co-owners are paying tax at the higher marginal rate. There is also the likelihood of penalties for early redemption and the inevitable charges related to remortgaging. Take advice early - and take it from experienced, qualified and registered mortgage advisors.
To speak to a buy to let mortgage adviser contact us on 01628 507477.
Related articles:
Download our Free First Time Buyers Guide
Recent posts
Budgeting over the Christmas Period
3 days ago
The most wonderful time of the year can easily turn into the most expensive time of the year. Watching the pennies doesn’t mean that the Christmas festivities have to stop, following a few budgeting tips can mean you still have a special Christmas and don’t go into the new year in debt.
Preparing your home to sell in winter
7 days ago
December is usually a less desirable time to buy as many people don’t want to move over the holidays. However, prospective buyers do start to look at this time. Selling your home in winter may require a bit of extra attention to showcase your property at its best.
We look at why mortgage rates increased following the Bank of England's choice to reduce the bank rate, and should you fix now?
UK 2024 Autumn Budget: Housing
30 Oct 2024
On 30th October 2024 the Chancellor, Rachel Reeves delivered the Autumn budget which we had previously been warned would be “difficult”. Below we have summarised the main housing points.
Talking about money with kids
23 Oct 2024
In an increasingly cashless society, money is an intangible concept for children to grasp. In the days of coins and notes, kids could see money as something physical you require to purchase goods and services.
In order to help teach your children about money, we have listed some tips below;
Labour Autumn Budget Predictions: Housing
18 Oct 2024
The UK’s chancellor, Rachel Reeves will deliver the Labour government’s autumn budget at the end of the month, we take a look at what could be announced in relation to housing.
Recent research from Halifax has revealed the most sought-after locations for first time buyers in Britain.
The data which was taken from the Halifax House Price Index looked at areas outside of London where those looking to purchase their first property were buying. Despite high property prices and increased rates, these first time buyer hotspots have remained popular.
How can I look after my mental health?
7 Oct 2024
Taking care of your mental health means looking after your emotional, psychological, and social wellbeing. There are several ways we can practice self-care that will help to improve our physical and mental health. This can help to reduce our risk of illness, manage stress, and boost our energy levels!
More information
Trusted by
