Buy to let

wicket-maiden

Good evening Guys

I've been lurking around here for a while now and what a fantastic website it is however, and now I am looking for some urgent advice.
I currently have a flat with a mortgage of £24,000 outstanding and the mortgage is a repayment at 2.5%. I am looking to rent this property out and buy another one for £145,000. Do I change my current mortgage to buy to let and increase the mortgage to max which would be approx £75,000 and interest only and lend another £70,000 on a residential mortgage to enable my new purchase. If so what would i claim from the revenue, will it be interest on the original loan or the new buy to let amount. Or do i have buy to let on £24,000 and £121,00 on the new property? My current flat need so work doing on it before i could rent it out.
I am so confused - please help :embarasse
wicket-maiden.

Thrugelmir

Firstly you will need to approach your current lender and sound them out to your proposal. They will advise if they are willing to agree to your request and if so on what terms.

All the interest on let property can be offset against rental income for tax purposes. For your investment to be worthwhile ideally the net after tax profit on renting out your property should be sufficent to pay off the capital element of the mortgage.

new_home_owner_3

I would try and steer clear of getting yourself a but to let mortgage the fees are too high, depending on lender find out if they give consent to let if they do remortgage your house now interest only to get your deposit, you say the flat needs extra work doing on it, say thats what you need the extra money for when you remortgage.
let.
Then after getting consent to let get another residential mortgage, i must say though try and make sure they will give you consent to let before you do this.

VIGILANT22

[QUOTE=wicket-maiden

What would i claim from the revenue, will it be interest on the original loan or the new buy to let amount. Or do i have buy to let on £24,000 and £121,00 on the new property? My current flat need so work doing on it before i could rent it out. .[/QUOTE]

Bringing what was yr residence into the business (btl is business/investment)...you can release equity for deposit on new home and claim tax relief on both properties...

http://www.hmrc.gov.uk/MANUALS/BIMMANUAL/bim45700.htm

wicket-maiden

Thanks for the replies - lots of food for thought...