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    • milleniumaire
    • By milleniumaire 5th Dec 17, 7:50 PM
    • 16Posts
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    milleniumaire
    Remortgage home for buy-to-let?
    • #1
    • 5th Dec 17, 7:50 PM
    Remortgage home for buy-to-let? 5th Dec 17 at 7:50 PM
    Hi, a couple of years ago we purchased a buy-to-let flat on a discounted mortgage rate which is coming to an end. Obviously, we don't want to end up on a standard variable rate so we are looking at options.

    Next year, the mortgage on our own home also ends and we will be looking to take out a new mortgage. We are in our early 50's and when our rubbish endownments matured 3 years ago, we used them to part fund a home extension rather than reducing our low 0.75% mortgage amount (as it was then).

    When our home mortgage ends we are considering taking out a larger mortgage to cover the mortgage of our own home and of the buy to let property.

    The figures:
    Buy to let is worth £125K and the mortgage is £75K. Interest rate is about to increase to 4.49%.
    Own home is worth £650K and the mortgage is £40K. Interest rate is 0.5% above base rate, so at 1%.

    We are therefore considering remortgaging our own home for £115K. We are both border line 40% tax payers. A few things spring to mind that we need to consider:

    1. Would a bank agree to a mortgage covering two properties or don't they really care what the money is being used for?
    2. We won't get tax relief on the buy to let interest payments.
    3. Our home mortgage doesn't end until August 2018. Do we remortgage now or wait? If we wait, we would be on a standard variable rate of 4.49% for the buy to let until August as it probably wouldn't be cost effective to remortgage for an 8 month period. If we remortgage our own home now we lose 8 months of 1% mortgage repayments!

    I know I need to do some research on mortgage rates and perform some calculations, but would appreciate any thoughts on the best way forwards. Is there anything else I need to consider?

    Thanks.
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