which option?

cederic

I have a house, which I live in. It has a mortgage that I'm clearing at the rate of 1% per month (they didn't drop the repayment when the interest rates dropped), and the outstanding balance is at worse 35% of the property value. The outstanding balance is also "only" around 75% of my gross annual salary.

I want to buy a second property, due to work. I will live in both, one at weekends, one midweek.

I'm torn between various options:
1 - release the equity, remortgaging home A with a high LTV and use the cash to buy a second property outright
2 - keep current mortgage, take out second mortgage on new home (I have enough for a 10-20% deposit in savings)
3 - remortgage home A, but for same balance, taking advantage of low LTV to reduce monthly repayments, to help cover cost of new mortgage
4 - is it possible to get one big mortgage against both properties? That would be best
5 - keep renting midweek

The big attraction with option 1 is that with cash in the bank I can possibly negotiate a big discount on new-build property where I want to buy. By big I mean 30% just for asking, maybe 40-45% discount if I can negotiate it well enough. Being able to pay within a week with cash gives a far stronger negotiating position.

I'm just not sure whether I'll get a high LTV and whether it's worth releasing the equity in a house I'm only a few years from owning outright.

Any thoughts or suggestions from the financially imaginative on here?