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Forces Help to Buy is designed to help service personnel purchase a home to live in, not as an investment. The scheme cannot be used to buy a property with the intention of letting it out.
If you use this scheme, the expectation is that you will occupy the property as your main residence. Buying with the goal of renting it out would not be permitted.
That being said, if you need to relocate due to a posting, there may be ways to adapt your mortgage, such as applying for consent to let.
Renting Out Your Home After Using Forces Help to Buy
While the scheme does not allow you to purchase a buy-to-let property, some homeowners find themselves needing to move unexpectedly.
In these cases, mortgage lenders may allow consent to let, which is temporary permission to rent out your home while keeping your current mortgage.
Lenders assess requests individually, and approval is not guaranteed. They will consider factors such as how long you have had the mortgage, your financial situation and the reason for applying.
If they agree, there may be conditions, such as an adjustment to your interest rate or an administrative charge.
Key Things to Know About the Scheme
Before applying for Forces Help to Buy, it is important to understand how it could affect your mortgage and future plans:
- The loan is interest-free but must be repaid within ten years, usually through deductions from your salary.
- Mortgage lenders consider the loan as a financial commitment, which may influence how much you can borrow.
- If you sell the property before repaying the loan in full, the outstanding balance must be settled first.
- If you decide to remortgage later, the loan could affect affordability checks and may need to be repaid depending on the lender.
You can learn more about rules and eligibility by reading our article Forces Help to Buy Scheme Explained.
Remortgaging After Using Forces Help to Buy
If you decide to keep the property as a long-term investment, remortgaging to a buy-to-let could be something to consider.
This would mean switching from a residential mortgage to one designed for rental properties.
Switching to a Buy to Let Mortgage
Lenders will usually want you to have owned the property for a certain period before agreeing to a remortgage.
They will also assess rental income to ensure the mortgage is affordable. Buy-to-let mortgages often require a larger deposit and can come with higher interest rates.
How the Loan Affects Your Remortgage
If the Forces Help to Buy loan is still outstanding, this could impact your remortgage options.
Some lenders may ask for it to be repaid before approving a new mortgage, while others may factor it into affordability assessments.
Speaking to a mortgage advisor can help you explore your options, whether that means switching to a buy-to-let mortgage, selling the property or looking at alternative solutions.
At UK Moneyman, our mortgage advisors understand the unique challenges faced by military personnel. Whether you are looking to buy, remortgage or look at your mortgage options, we are here to help.
