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Why can't I remortgage on a consent to lease with halifax

Hi I have a consent to lease with the Halifax as im renting out a 1 bedroom house and we are now renting. Our house is worth 65000 and we were looking to remortgage to buy another house. When we spoke to a mortgage advisor she said that that was fine and we were going to release 21000 from the consent to lease and the rest in a normal mortgage. That was brilliant and we put an offer in our house which was accepted. The only problem now the consent to lease won't let us release any of the money! So it's really upset us. Can they do this and what other options do we have. The house we r after Is a repossession so we need to be quick. Thanks


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A Consent to Lease is intended to be a temporary arrangement for people who have to move location and can't sell in the short term, or who have to move for work but intend to return to the same property. It is NOT intended as a permanent arrangement so that you can get residential mortgage rates whilst carrying on a business of letting. The house you are letting out on a semi-permanent basis should be on a Buy To Let mortgage. That means a higher interest rate because there is a higher perceived risk but you can get tax relief on the interest. It also would require you to have a higher level of equity in the property. That would appear to be your problem. If you intend to move into the new property as a permanent home, it should have a residential mortgage, but if you are only moving in temporarily while you develop it, that should also be on a BTL mortgage. Mike

Would my best option be then to Pay off my mortgage and remortgage with someone else so i can release the money?

From what you have said, you should be on a BTL mortgage, whoever it is with. That would mean higher equity retention so you might not be able to release any capital. Instead of 10% for a residential mortgage, you would need at least 20%, possibly more. Ask a good mortgage broker, such as Tim@lovemoney.com Mike

I don't understand what u mean, surely if u clear my mortgage eith my current lender and remortgage with someone else i should be able to release 75% of it, but I'd only be looking for a remortgage of 30000 for a deposit for a new house?

If your mortgage is only a small portion of the value, then you should be able to remortgage to release funds as your deposit. That aspect hadn't been mentioned before so I had to cover the possibility that you only had a small equity in the property. The problem then comes down to the fact that you should only have 1 residential mortgage except for a temporary period which I have previously mentioned. The other should be a BTL mortgage. If you have owned the property for a long time, have you considered the Capital Gains Tax implications? Even if it doesn't increase in value any more, you will have to pay CGT on past gains if you keep the property for more than 3 years after you moved out. It might be better to sell before then or crystalise the profit in some way. Mike