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Mortgages and subletting – Can you do it legally?

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Aug 15, 2022

Mortgages and subletting – Read more on how to sublet and if you are allowed to do it

You may be in a situation where you need to live with someone else or cannot sell your home. You might be concerned about whether this is considered subletting and what that could mean for your mortgage.

You might also consider letting your tenants sublet your buy-to-let property to increase your income and reduce void periods.

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Will your mortgage lender allow you to sublet?

There are many similarities among mortgages from different lenders. However, there are also many differences.

Your lender’s approach to subletting or lodgers is one of the details that may differ from mortgage lender to mortgage lender.

Some lenders will allow subletting without permission, while another mortgage lender will require you to apply for consent to let.

If you are looking for buy-to-let mortgages or want to allow tenants to sublet your room, we recommend you speak with an experienced mortgage advisor. You can also read our guide on how buy-to-let mortgages work.

This article will give you an overview of subletting mortgages.

Enquire here for independent financial advice on rental income. Our mortgage brokers will be happy to help free of charge.

We have a few mortgage providers lending buy-to-let mortgages, interest-only mortgages, a first property residential mortgage and every other mortgage you need a mortgage approval for.

No matter what your personal circumstances, we can introduce you to a mortgage provider tailored to you.

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What is subletting for owner-occupier Mortgage purposes?

Subletting is a practice by tenants who rent out their homes or rooms to tenants not approved by their landlord. However, subletting may not be something you have thought of as a homeowner.

Your mortgage may allow you to take in a lodger (or more) as a sublet of your home for rental income. You need proof from your mortgage lender confirming this is possible.

This is true for most residential mortgages.

Can I sublet my house without changing my mortgage?

You can’t take in lodgers if you have a mortgage on your home.

Also, you should speak with your lender directly.

You don’t have to modify your mortgage if you can. You may have to change your mortgage if you are unable.

  • Modify your mortgage.
  • Ask permission to sublet your existing mortgage.

A qualified mortgage expert like the ones we work with can help in any of these cases. They can help you write the correct letter to your lender if you need permission. An advisor can help you choose the best mortgage if you want to modify your mortgage so that you can sublet a portion of your house and take in a lodger.

You may need to modify your home insurance to include the subletting.

Is there a specific mortgage for subletting?

Some residential mortgages allow homeowners to sublet their homes to a lodger. You can also get mortgages for this purpose. They may have higher interest rates.

It may be more beneficial to get a mortgage that allows you to have a sublet or a mortgage that only allows you to take in a lodger.

A subletting mortgage might be better suited for you if you are looking to sublet your house and take in lodgers regularly.

Alternatively, you may be able to change your residential mortgage to a buy-to-let mortgage.

Is my mortgage allowing subletting?

Some mortgages allow subletting for a limited period, similar to owner-occupier agreements. Many BTL mortgages state explicitly that subletting is not permitted. This means that allowing tenants to sublet your property could cause your mortgage to be invalidated.

Before subletting your property, you should carefully read the terms of your buy-to-let mortgage. If it’s not allowed, but you still wish to sublet your tenants, you will need a new mortgage.

A mortgage advisor can help you find the best buy-to-let mortgage, which allows you to sublet for the period you need. You can do the research yourself, but it won’t let you see the entire market. You will also be wasting a lot of time and potentially money.

Enquire here today for mortgage advice and to begin a mortgage approval.

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Talk to a subletting mortgage specialist now

You may be interested in allowing tenants to sublet your property or taking on a lodger. Mortgage advice is necessary to ensure you are following your mortgage’s terms.

We will put you in touch with one of our buy-to-let brokers who has experience with subletting mortgages and has access to lenders throughout the UK.

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