Consent to let out

Your client can apply for consent to let whilst holding a residential mortgage. They will need to complete an application form and if granted a loading of up to 1% will be applied to the current mortgage rate. Unauthorised lets can be chargeable with a loading of up to 2%.  
 


Please direct your client to Renting out your home where further details can be found.  

 

Property already let out

The following criteria for let properties is subject to our underwriters discretion and we may make exceptions in certain circumstances. We normally expect all existing mortgages to be self-financing. 

The outstanding mortgage(s) can be ignored if the property is already let from the date of application and the monthly rental amount is at least 145% of the monthly mortgage payment at 5.5% interest*. 

Where the monthly rental payment does not cover mortgage payments by 145% at an interest of 5.5%*, we will calculate the deduction as the monthly mortgage payment multiplied by 145% minus the monthly rental income. If the rental income does not meet at least 100% of the calculation the full mortgage payment will be taken as a commitment. 

*As the majority of Buy to Let properties are mortgaged on an interest only basis, we use an interest rate of 5.5% on the outstanding mortgage (as evidenced on the credit records) to determine if the rental income meets the 145% rule.

The applicant(s) may be asked to provide: 

• Bank statements for the period that the property has been let 
• Evidence of the last 12 months mortgage payments 

   

Let to buy (LTB)

Let to Buy (LTB) applications are acceptable.   

The anticipated monthly rent should cover the monthly mortgage payment by 145% at an interest rate of 5.5%*. If it does not we will calculate the deduction as the monthly mortgage payment multiplied by 145% minus the monthly rental income.  If the rental income does not meet at least 100% of the calculation the full mortgage payment will be taken as a commitment. 

*As the majority of Buy to let properties are mortgaged on an interest only basis, we use an interest rate of 5.5% on the outstanding mortgage (as evidenced on the credit records) to determine if the rental income meets the 145% rule.

The applicant(s) may be asked to provide: 

• Verification of rental Income - A copy of the rental valuation document which must have been completed by an ARLA registered agent
• Consent to Let - Evidence the customer has consent to let
• Verification of future mortgage balance - If the customer is applying to re-mortgage the property to a BTL – a copy of the KFI or ESIS document will be required to evidence the future mortgage balance.