Buy-To-Let Mortgage combined with main Mortgage

revoman_2

Can anyone tell me is it possible to combine a buy-to-let mortgage with my main mortgage? The situation is that I have a main property (in which we live) with a good-sized mortgage but which is less than half the value of the property, and also I have a property which I let out, with a larger mortgage. I cannot increase the mortgage on my home property on a salary/multiples basis, but there is lots of equity in there such that I am looking for a mortgage company who would lend the money for the buy-to-let property against my main house, but allow it to be used for the rental property, and hence allow the interest to be written off against tax, with the interest being at a lower rate because of their security.
Many thanks.

NeilH_2

Hi revoman

The problem here is the buy to let mortgage is not regulated by the FSA, it is essentially a commercial venture; whereas a residential mortgage is subject to the FSA regime. It is not possible to mix the two.

It is possible to remortgage the buy to let property for up to 85% LTV providing the rent covers the payment x1.3 times.

HTH
NeilH

revoman_2

Neil

Thanks for that, but 85% and 1.3 is the situation I'm in (ie no bad situation), but you're saying there is no way I could secure the flat against my house and thus have a higher than 85% mortgage on it but less than 1.3, because it is not regulated by the FSA? Is that a regulation and therefore not worth hunting around about then?

Thanks.

Revoman.

fesdufun

Not sure if this will help.

We have two properties and the mortgage is all on our main residence as a standard mortgage. When I contacted the tax office they said I could still claim tax relief even though it was on our main property as long as I could prove that the loan was orginally for the rented property. This way we pay a cheaper interest rate on the mortgage.

When we approached the Halifax to get a mortgage quote they took the rent into account as income when calculating how much we could borrow. The maximum amount we could borrow was mouch higher than if our wages were just taken into account.

Good Luck

revoman_2

Fesdufun

That is an excellent idea, thank you! Will start to have a think on that, and any other suggestions more than welcome.

Thanks.

Revoman.

nmbash

fesdufun wrote:

Not sure if this will help.

We have two properties and the mortgage is all on our main residence as a standard mortgage. When I contacted the tax office they said I could still claim tax relief even though it was on our main property as long as I could prove that the loan was orginally for the rented property. This way we pay a cheaper interest rate on the mortgage.

When we approached the Halifax to get a mortgage quote they took the rent into account as income when calculating how much we could borrow. The maximum amount we could borrow was mouch higher than if our wages were just taken into account.

Good Luck

Hi, Until I read this I was in the middle of tearing my hair our because I knew I was going to be clobbered by the tax on my rented property.

The mortagage on the rented is really small, but was not changed to a BTL because the Building Soc at the time did not do BTL, they do now so I was going to increase the rented and decrease the main residence. The mortgage on the main residence almost matches the value of it. Why I did not do this last year I don't know - I keep slapping myself for it :-)

Anyway, I got in touch with an Accountant to discuss what you said. The account said he thought you could only do this on an offset mortgage. Is there an Inland Revenue reference that I can point him to ( or just try another accountant)

Any help appreciated, since the rent is used to cover the main residences' mortgage, but at the moment I can just see a chunk going towards tax.