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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 4th December 2020*

There may come a time when, rather than sell up or move out, you may need or want to take in a lodger. If you own your home and are interested in taking in a lodger you’re probably concerned about if this would be classed as subletting and how that might affect your mortgage.

Or, if you’re a landlord you may be thinking about allowing your tenants to sublet your buy-to-let property as a way to lower void periods and increase your annual income.

While there are many similarities between mortgages from different lenders, there are also many differences.

The way your lender looks at taking in a lodger and subletting is one of those details that can be treated differently from lender-to-lender; some may allow a lodger or subletting activity without the need for permission, while others will require that you apply for permission.

We would always recommend speaking with an experienced mortgage advisor if you need a mortgage and have plans to take in a lodger or allow tenants to sublet a room or rooms.,

To give you a better idea of mortgages for subletting, we’ve written this article, where we discuss:

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What is classed as subletting for owner-occupier mortgage purposes?

While you’re probably aware of subletting as an activity by tenants who sublet their home or rooms in it to other tenants not approved by their landlord, you may not have considered subletting as a homeowner.

Under the terms of your mortgage, taking in a lodger or lodgers could be considered as subletting part of your home.

Although this isn’t the case with all residential mortgages, it is for many.

Can I sublet my home without changing my mortgage?

If you have a mortgage on the home you live in and wish to take in a lodger, you will need to check the terms and conditions of your existing residential mortgage to find out if you can take in a lodger and sublet part of your home without permission.

You should also speak to your lender directly.

If you can, then there’s no need to change your mortgage. If not,, you may need to either:

  • Change your mortgage.
  • Get permission to allow the sublet under your existing mortgage.

In either of these situations, a qualified mortgage expert, like those we work with, can help. If you need to get permission, they can advise you on the details of the letter you should write to your existing lender. If you need to change your mortgage to one which will allow you to sublet part of your home and take in a lodger, an advisor can help you find the right mortgage for your needs.

You may also need to consider whether you need to change your home insurance to cover the fact you’re subletting.

Are there specific mortgages for subletting?

Yes, some residential mortgages will simply allow homeowners to take in a lodger and sublet their home. There are also some mortgages designed for that purpose. However, they may come with higher rates of interest.

If you only plan on taking in a lodger and subletting part of your home now and again or even for a single period due to certain circumstances, it may be better to find a mortgage that simply allows you to have a lodger, rather than one specifically designed for subletting.

Where you think you might want to regularly sublet your home and permanently take in lodgers, then a specific subletting mortgage may be more suitable for you.

Does my buy-to-let mortgage allow subletting?

As with owner-occupier agreements, some buy to let (BTL) mortgages may allow subletting, at least for a set period per year. However, many BTL mortgages specifically state that no subletting is allowed. That means if you allow your tenants to sublet your property, it could invalidate the terms of your mortgage.

You should check through the terms of your buy-to-let mortgage carefully before subletting your property. If the terms state it isn’t allowed, but you still want to let your tenants sublet, then you will need a different mortgage.

A mortgage advisor can help you find the right buy-to-let mortgage that allows subletting activity for the period of time per year that you require. Of course, you can always undertake that research yourself but you won’t be able to access the whole of the market. It will also take up a lot of your time.

Speak with a subletting mortgage expert

If you’re interested in taking on a lodger or allowing tenants to sublet your property you may need some mortgage advice to ensure you’re acting within the terms of your existing mortgage.

That’s where we can help. Get in touch with Online Mortgage Advisor on 0808 189 2301 or make a quick online enquiry.

We’ll put you in touch with one of the buy to let brokers we work with who has experience with mortgages for subletting and has access to lenders across the whole of the UK.

Updated: 4th December 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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