Can You Rent Another House if You Have a Mortgage?
Yes, you can rent a different house to live in while you still own a property with a mortgage on it. There is no rule that says a homeowner must live in the home they own.
The complication is not renting a place for yourself, which you are free to do at any time. The complication is what happens to the home you own once you move out and either leave it empty or let it to a tenant.
A standard residential mortgage is granted on the condition that you live in the property, so moving out and renting it to someone else usually means you need your lender's permission first.
At a glance
- Renting a home to live in
- Allowed at any time
- Letting your mortgaged home
- Needs lender permission
- Short-term route
- Consent to let
- Longer-term route
- Let to buy or buy-to-let remortgage
Key Takeaways
- You can rent a home to live in whenever you like - owning a mortgaged property does not stop you signing a tenancy elsewhere.
- Letting out your own mortgaged home is the part that needs permission - a residential mortgage assumes you live there, so you must not let it without telling your lender.
- Consent to let is the short-term fix - it is temporary permission from your existing lender, often for a fixed period, sometimes with a small rate or fee change.
- Let to buy is the longer-term route - you remortgage your current home onto a buy-to-let deal and buy or rent your next home separately.
Renting a Home for Yourself Is Always Allowed
If you simply want to move out of the house you own and rent somewhere else to live, nothing about your mortgage prevents that. You can sign an assured shorthold tenancy, pass referencing and move in like any other tenant.
Landlords and letting agents will run affordability and credit checks, but they are checking whether you can afford the rent, not policing what you own elsewhere.
The question only becomes complicated when you decide what to do with the home you are leaving behind. Broadly, you have three options: keep it empty, sell it, or let it to a tenant.
Keeping a mortgaged home empty for a while is generally fine, though you should check your buildings insurance, as many policies restrict cover once a property is unoccupied for 30 or 60 days. Selling is straightforward.
Letting it out is where you need to act before anything else.
Why Letting Your Mortgaged Home Needs Permission
Almost every residential mortgage contains a clause requiring you to live in the property as your main home. Letting it to a tenant without telling your lender breaches that condition.
In practice this can count as mortgage fraud, and it can invalidate your buildings insurance too, leaving you exposed if something goes wrong.
The good news is that lenders deal with this situation constantly. People are relocated for work, move in with a partner, or want to try a new area before committing. Lenders have two well-established routes to keep you on the right side of your agreement.
Consent to let
Consent to let is temporary permission from your current lender to rent out your existing home while keeping your residential mortgage in place. You typically apply directly to your lender, and they may grant it for a set period, such as 12 months or until your current deal ends.
Some lenders charge an administration fee or add a small margin to your interest rate; others grant it free of charge. It suits people who expect the arrangement to be short-lived, such as a temporary secondment.
You can read more in our guide on whether consent to let is better than buy to let.
Let to buy
Let to buy is the longer-term route. You remortgage your current home onto a buy-to-let mortgage, which is designed for a property you rent out, and you use any released equity towards a new home.
You then either buy your next home with a separate residential mortgage or rent somewhere to live. It works well when you want to keep your first property as a long-term rental rather than sell it, and when you plan to be away for years rather than months.
Telling Your Lender: What Actually Happens
Contact your lender before a tenant moves in, not after. Explain that you are moving out and want to let the property, and ask whether consent to let or a buy-to-let remortgage is the right fit.
Lenders will usually want to know how long you expect to let the property, whether you have a residential mortgage lined up for your new home, and sometimes the expected rental income.
If you are also buying your next home rather than renting it, affordability is the big hurdle. Lenders will assess whether you can support two mortgages, though many will treat expected rental income from the let property as offsetting its own mortgage cost.
It is worth checking your borrowing headroom early using our mortgage affordability calculator and modelling repayments with the mortgage calculator.
Tax and Practical Points to Weigh
Letting a property turns you into a landlord, with responsibilities that come as a surprise to many first-time accidental landlords. Rental income is taxable and must be declared to HMRC through Self Assessment.
You will also need to meet legal obligations such as gas safety certificates, electrical checks, deposit protection and Right to Rent checks. When you eventually sell a property that has not been your main home for the whole period you owned it, Capital Gains Tax may apply.
These are areas where a qualified tax adviser or mortgage broker is worth the fee, because the rules change and the sums can be significant.
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Frequently asked questions
Do I have to tell my mortgage lender if I rent out my house?
Yes. A residential mortgage requires you to live in the property, so you must get consent to let or move to a buy-to-let mortgage before a tenant moves in. Letting without permission breaches your agreement and can invalidate your insurance.
Can I get a new residential mortgage while keeping my old one let out?
Often yes, through a let-to-buy arrangement. Lenders will assess affordability across both properties, though many count expected rental income towards the mortgage on the let property. Speak to a broker to see what you can support.
Is it cheaper to rent somewhere or buy a second home?
It depends on your circumstances, but renting avoids a second set of buying costs and the higher-rate Stamp Duty that usually applies to additional properties. Keeping your first home as a rental and renting elsewhere can be a flexible middle ground.
How long does consent to let usually last?
It varies by lender, but consent to let is commonly granted for a fixed term such as 12 months, or until your current mortgage deal ends. After that you would typically need to renew it or move to a buy-to-let mortgage.
General information only, not financial advice. Mortgage and tax rules change, and your circumstances are unique - speak to a qualified mortgage broker or tax adviser before acting.
