Posted on 10 October 2016
My wife and I are planning on retiring next year and travelling for a while. Whilst we are away we would like to let our house out to cover the mortgage. We currently have a small mortgage with First Direct but will need to change this for a Buy-To-Let mortgage, however our income (excluding the rental) will be less than £30,000 a year. What options are available to us and are there any BTL lenders who would be available?
In this circumstance I would suggest that in the first instance you approach your current mortgage provider to discuss a possible Consent to Let arrangement. 'Consent to let' means you get permission from your current residential mortgage provider to let your home to paying tenants. This differs from having a buy-to-let mortgage, for which the intention to lease the property is made clear at the time of the application. Most lenders will consider this and should allow you to Let the property for up to 12 months. You may find that your lender will charge an admin fee for the facility and may revise the rate of interest you are charged. Your lender will need to be satisfied that your intention to let your property has come about through a genuine change in circumstances. Lenders might not allow you to convert if it appears that your intention was to let your property, and that you applied for a residential mortgage to secure a better mortgage deal.
Depending on how long you are travelling for, the alternative option available, if your lender will not offer a Consent to Let, would be to remortgage to a BTL property. There are two providers that may consider this given your circumstances. You need to be aware that there is likely to be a two year early repayment charge with either provider so you would need to factor in this penalty charge should you wish to return to the property within the next two years because you would be required to revert back to a traditional residential mortgage before doing so.
Furthermore, you may find it difficult to obtain a residential mortgage again if you have been out of the country for a significant period and you will need to meet residential affordability criteria with any new lender at this time too.
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