Can you rent out your house if you still have a mortgage?
Often yes, but read your loan first. Most mortgages on a main home carry an occupancy clause: you promise to live there. That promise is usually meant for the first stretch of ownership, and lenders handle owners who move out later in different ways, so the answer sits in your own loan papers and a short call or email to your servicer. Do that before the first tenant signs, then switch your insurance, open separate books and keep the mortgage payment current.
What the occupancy clause says
Fannie Mae, whose rules shape most home loans, separates three kinds of homes. A principal residence is a property the borrower occupies as their primary residence. A second home is used by the borrower part of the year and cannot be rental property. An investment property is owned but not occupied by the borrower (see Fannie Mae's occupancy types, read October 2026). Rates and terms are priced for the type you told the lender you were buying.
When you sign for a main home, the security instrument (the mortgage or deed of trust) includes a clause about occupancy. Wording and time frames differ by lender and state, so we do not quote a number here. Find your own copy, look for the heading Occupancy, and note exactly what it asks and for how long. If you have not owned the home long, the timing matters most.
What to ask your servicer before you move out
Your servicer is the company you send payments to. Ask it in writing, so you have a record:
- Does my loan have an occupancy requirement, and has it been met?
- If I rent the home after that period, do you need notice, or any form signed?
- Will the lender require a different kind of insurance policy once the home is rented?
- Is the due on sale clause affected if I later move the home into an LLC? (Ask before any transfer; see moving a rental into an LLC.)
Keep the answers. If a servicer says something by phone that matters, follow up with an email that restates it.
Your insurance changes the day you rent
A standard homeowners policy is written for a home its owner lives in. Once a tenant lives there, many insurers expect a landlord policy (often called a dwelling fire or DP policy). Tell your insurer you are renting before the lease starts and ask what they require. Our post on landlord insurance vs a homeowners policy lists what differs. Lenders also check that the house stays insured, so a lapse can lead to coverage the lender buys and bills to you.
Can the rent cover the loan? A made-up check
Before you commit, add up every monthly cost of owning the home as a rental, not only the loan payment. Taxes, insurance, repairs, vacancy and any association dues belong on the list.
Example a made-up house rents for $2,100. Mortgage principal and interest $1,150, property tax and insurance $420, a repair reserve of $175 and a vacancy allowance of $175 (about one month a year). Costs total $1,920, so the house leaves $180 a month. If a roof or water heater fails, one repair can erase a year of that. Many owners also keep a cash reserve; see how much reserve to keep.
Your own mortgage interest, taxes and insurance become rental expenses, and your tax preparer decides how they show on your return. See recording a mortgage payment for how to split principal from interest.
A short order of operations
- Read the occupancy clause and send your written questions to the servicer.
- Get a landlord insurance quote and start it the day the tenant takes possession.
- Write down your date of conversion and the home's value that day for depreciation (see depreciating a home converted to a rental).
- Open a separate bank account for the rental, so rent and expenses stay apart from your own money.
- Screen applicants the same way every time and use a written lease for your state.
How DoorKeeping handles it
Once the house is rented, DoorKeeping keeps its own set of books: rent matched from your bank feed, the mortgage and tax payments you code, and expense accounts that map to Schedule E lines. You can ask Claude or ChatGPT what the house cleared this quarter, and anything involving money waits for your one-tap approval. It costs $2 per unit per month, so one house is $2. DoorKeeping gives no legal or lending advice, so your servicer and your tax preparer decide what applies to you.
Sources
Questions
- Do I have to tell my mortgage company I am renting my home?
- Read your loan's occupancy clause and ask your servicer in writing. Requirements differ by lender, and your own loan documents control.
- Does renting my home change my homeowners insurance?
- Usually yes. Policies for owner-occupied homes often do not fit a rented home, so ask your insurer before the tenant moves in and ask about a landlord policy.
- Can I use the rent to pay my mortgage?
- Yes. Rent is income and your loan payment is still due; keep the rental money in its own bank account and pay the loan from it.