Change of Usage

Posted on 17 June 2010 by Rebecca

My husband and I have been living in our house for 4 years and we are currently in the process of a change of use from residential to business/residential. We have a fixed term mortgage, do we need to change our morgage agreement along with the change of use or can we leave it the same?


Your mortgage provider has lent you the money on residential terms using your property as security for repayment of the loan. Any change of usage must be reported to your Lender and their consent obtained prior to going ahead.

It is very likely that your Lender will want to change the terms of your mortgage and may even demand it's repayment and which point you will need to look at remortgage options. In addition to having to repay the mortgage, early repayment charges are likely to apply and you may find that a new mortgage is arranged on semi-commercial terms at a higher rate that you currently pay.

What actually happens will really depend on the type of business you intend to operate from your home and if you decide to go ahead, you need to ensure that your insurance provider is advised. Failure to do so may result in any future claims being invalidated.


Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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