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I have a Halifax 3 year fixed mortgage. I have an opportunity to move abroad through work for 1-2 years. The letting agent has advised i need a letter

by adamoffofglasgow 13 March 2010 |

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of consent from the mortgage provider so I met with the branch mortgage advisor today. Problem is they want to move the deal to a new product, charge £999 to do this and change the rate from 4.69% to 5.49%. I have 50% equity on the property and will still be paid in UK so the risk is minimal for them. I understand they would need a admin fee maybe to provide what i need but surely they are being unralistic. Is there any options to contest the requirement to change to a new product - particularly when it is a short term move?

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272

Swarbs posted
Sadly not. You took out the mortgage on the basis that you would be living there, when it's a rented property it becomes a completely different story. The bank's rationale is that if you run into serious financial difficulties you are much more likely to bust a gut to keep paying the mortgage on your home - the alterantive is to be evicted. In contrast, if the property is rented out you are more likely to just cut your losses and walk away. This is what the numbers show them, based on the past behaviour of landlords as a whole, so that is what they use to make their decisions. Also, if you are currently tied in to your fixed rate with repayment penalties, they know it will be expensive for you to switch, so they milk as much as possible out of you whilst they have you hooked. Being paid in the UK does not necessarily reduce this risk, as you could still be made redundant.
How much are the early repayment charges? It could be worth you paying them and moving to a BTL mortgage - Principality Building Society have a 4.59% 2 year fix with a £999 application fee, so that might work out cheaper. Or, if you threaten to leave Halifax based on what you feel are their unreasonable demands, they may relent and allow you to pay a lower fee.
Posted on 13 March 2010 | Love 1 love Report
804

MikeGG1 posted
Please bear in mind that the costs of the mortgage can be offset from the rent for tax purposes, so it is not all doom and gloom.
You would probably end up paying less after tax has been taken into account.
The £999 should be allowable as it is a BTL cost.
Mike
Posted on 13 March 2010 | Love 0 loves Report
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Mister W posted
When we started renting out my wife's flat we got different answers from the bank depending who we asked. The mortgage adviser is interested in selling you a new mortgage so we asked customer services. They were happy to leave us on the same mortgage product and it cost us a £250 fee for a letter giving us permission to rent the flat. Try giving Halifax customer services a call, stress that it's a short term move and see what they say.
Posted on 17 March 2010 | Love 0 loves Report

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