What is Consent to let?

Consent to let is the permission granted by your residential mortgage lender allowing you to let your property out without the need to either convert your current residential mortgage  interest rate onto a buy to let rate or switch your mortgage away from your current lender to a new lender, which will invariably be a more expensive route for you.

What are the benefits of Consent to Let?

The benefits of consent to let are many:

  • Less hassle – no need to switch mortgage lenders and no paperwork.
  • No redemption penalties – without consent to let your residential lender may request that you take your mortgage to a new lender.  If you are currently tied into a deal you may incur a redemption penalty which could be an expensive option to take.
  • Better interest rate – In 99% of consent to let cases we see the main reason for seeking permission from the lender is that this is the most financially efficient method of allowing people to rent their house. The cost  in fees and the increase in interest rates in switching to a buy to let deal can be eye watering.

It’s Cheaper

Most people who enquire about consent to let do it for one of two main reasons:

  • They believe it is the right thing to do
  • It’s cheaper!

If you are currently on a low interest rate that you secured some time ago and you are locked into your current rate with redemption penalties for early repayment, you will want to stay with your existing lender as it will be much cheaper than switching to a new lender on current buy to let rates.

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What to do if your mortgage lender won’t grant your ‘Consent to Let’

If you find yourself in this situation then you need to call a mortgage broker to arrange a new mortgage for you.  This new mortgage will be known as a buy to let remortgage or a let to buy mortgage.

The mortgage broker will need to know the following basic details to determine which lender will be best suited for you as buy to let criteria changes from lender to lender:

  • Property value
  • Mortgage required
  • Expected rental income
  • Your basic salary/income.

Don’t Forget to Switch Your Insurance

One thing to remember when arranging a consent to let, a buy to let remortgage or a let to buy mortgage is to switch your existing residential buildings insurance policy to a landlords buildings insurance policy.  The insurance premium is marginally more expensive but if you don’t switch your insurance and you need to make a claim then you won’t be covered on your standard residential buildings insurance.

 

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