Should I buy a new house AND rent out my flat

coldstreamalways

We did this, I rent my flat out and OH and I bought a house together. We had to pay a big wodge off the flat to get 75% equity and a btl mortgage (the interest rate actually went down though). The rent covers 90% of the mortgage so this affected how much we could borrow on house.
If you are letting it through an agent (depends how much time you can devote to it), they may (may!) be agreeable to putting a higher rental value in writing so you can send this to potential lenders.
We had to plan so carefully financially, if it was empty, we would have to pay all of mortgage plus council tax. As it is, that money is coming off our debts.

We have been massively lucky with a fantastic tenant who I would do anything for, he is perfect.
The flat will end up being my "pension pot" as I probably won't work in any job for long enough to get a pension from the job. If all goes well!

Be very wary of the financial commitment though. Think worse case scenario all the time.

wondershrimp

what would be the penalties involved in selling the flat and paying off that mortgage?

why have two mortgages at high LTV with high rates, when you could sell and have one mortgage with a lower rate? or have i missed something?

coldstreamalways

wondershrimp wrote: »

what would be the penalties involved in selling the flat and paying off that mortgage?

why have two mortgages at high LTV with high rates, when you could sell and have one mortgage with a lower rate? or have i missed something?

Negative equity? Becasue the bottom fell out of the market, we would have lost lots by selling it then. Now, we pay less than 1/3 of the mortgage ourselves but at the end we will have a flat, no mortgage, and a big pot of "money" albeit invested in bricks and mortar.