Advice on Additional Borrowing please

lotusflower_2

Hi, I was hoping someone could advise me.
I want to borrow further on my home as there is a lot of equity there and i want to buy an investment property. I already have a BTL which is self financing.
My residential mortgage is 34k at 1.39% and they can lend me an extra 234k at either SVR 3.5% with £200 fee or Tracker at 2.49% above BoE with £995 fee for 24months.
I'm thinking the SVR deal......does it sound good or are there better offers?
Many thanks in advance.

lotusflower_2

*bump*
any advice please?

dimbo61

The BOE base rate was 5.5% in october last year!
A tracker at 2.49% above BOE would be 2.99% now and a mortgage of £234,000 would cost £583 interest only.
But if the BOE went back up to 5.5% that same mortgage would cost £1558 a month IO
ITS the same with the SVR deal no one knows what the rates wil be in 12/18 months.
Your own mortgage which is costing you £39 a month in interest would also jump up to £181 in interest if BOE rates went back up to 5.5%
Will your investment make more than £1558 a month( and thats interest only not repayment! )

socrates

If you can support the payments with your salary (salaries) and the property you intend to buy can give as near to 10% yield as possible then go for it.

If you do not tick both these boxes then I would advise steering clear - at the moment, later down the line things may change and be more in your favour