Mortgage Guide

Cheryl J asked:

at the moment we are 2yrs into a 3yr interest only mortgage on our first home. Ideally we would like to move but there is a large penalty if we move before the end of the 3yr period.

an option we have considered anyway is to rent out our current home to retain it as an investment and just to use the rental income to cover a majority of the mortgage.

does anyone know if we will need to change our mortgage before renting it out (ie would we need to change to a buy to let mortgage) or would we be able to rent it out on the current mortgage????

If we cant rent wihtout changing mortgages then it would enable us to move quicker wihtout having to pay the penalty.

Any ideas???

Thanks we cant remortgage as then we would have to pay the early repayment charge which si something ridiculous like £25,000!! We have had the house valued 6months or so ago and it has already increased in value by £20,000+ since purchase 18months previous (only bought for £150,000!) so no worries about losing value!!
we are looking to retain the house for long term and also are not worried about rental covering mortgage repayments as we can afford the excess as the excess we would pay to cover mortgage compared to the increase in value works in our favour.

Question posted courtesy of: Glenn