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Old 30.01.2018, 12:50
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Mortgage - own use, chance of renting in future?

I have been talking to different banks, some consultants. Worked out the basic details.

I know different rules apply based on if you buy the house for own use or as an investment (rent it out). Such as - B permit holder can not rent it out.
Banks charge higher rate for House bought as investment. I need to repay entirely what I took from Pillar 2A.

My question is -
If I buy a house for own use now, can I rent it out later? How does it affect me in terms of Mortgage terms. Do I need to re negotiate rates with bank, penalties?

Reason to rent it out could be practical (Job at a different location) or economical (live in a better but cheaper place and gain rent).

Much appreciate your experience , information. Thanks.
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Old 30.01.2018, 13:24
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Re: Mortgage - own use, chance of renting in future?

Same rules apply. You'd need to talk to your bank and also pay back the pension.
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Old 30.01.2018, 17:01
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Re: Mortgage - own use, chance of renting in future?

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I have been talking to different banks, some consultants. Worked out the basic details.

I know different rules apply based on if you buy the house for own use or as an investment (rent it out). Such as - B permit holder can not rent it out.
Banks charge higher rate for House bought as investment. I need to repay entirely what I took from Pillar 2A.

My question is -
If I buy a house for own use now, can I rent it out later? How does it affect me in terms of Mortgage terms. Do I need to re negotiate rates with bank, penalties?

Reason to rent it out could be practical (Job at a different location) or economical (live in a better but cheaper place and gain rent).

Much appreciate your experience , information. Thanks.
You would be in breach of your mortgage & they can ask for repayment on demand. You will need to increase your deposit, repay any deposit that came from your pension & pay a higher rate.
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Old 30.01.2018, 17:16
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Re: Mortgage - own use, chance of renting in future?

Thank you for the info so far.

I will definitely discuss with the bank what options I will have to switch from "own use" to "for rent". Of course, I will repay all the pension funds I used.

I am wondering why banks discourage giving it for rent. They have the house as guarantee, so the risk does not increase anyways.

If I have to live in the same house till mortgage is finished it is too much risk for me, especially considering we may change job, have to travel far.

I searched if anyone was in same situation, but didnt find much info.

cheers,
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Old 30.01.2018, 17:18
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Re: Mortgage - own use, chance of renting in future?

Most mortgages don't finish here, you only pay the interest so they go on forever. Too much tax advantage in keeping the mortgage going.
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Old 30.01.2018, 17:29
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Re: Mortgage - own use, chance of renting in future?

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Thank you for the info so far.

I will definitely discuss with the bank what options I will have to switch from "own use" to "for rent". Of course, I will repay all the pension funds I used.

I am wondering why banks discourage giving it for rent. They have the house as guarantee, so the risk does not increase anyways.

If I have to live in the same house till mortgage is finished it is too much risk for me, especially considering we may change job, have to travel far.

I searched if anyone was in same situation, but didnt find much info.

cheers,
The risk is totally different as you probably cant pay the mortgage in addition to you new housing costs. It becomes a commercial loan, the bank has no idea who is actually paying the mortgage & has not been credit checked the renter.
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