'Buy to let' mortgage or not?

peter_steele

Hi all,
I have a mortgage dilemma.
I have a small mortgage on the flat where I live (let's call it FLAT1). I am now buying a property as a buy to let (FLAT2).
Would you say it is better to increase the mortgage on flat 1 and buy flat 2 in cash or would it be better to have a mortgage on flat 2?
The dilemma comes from the fact that for FLAT 1 I can get better rates (since is the flat where I live) but if I take a mortgage on Flat 2 I can claim the interest from taxes.
I think you need to know my salary to be able to answer properly: I am on approx 43K.
thanks a lot
Peter

Thrugelmir

You may find lenders reluctant to remortgage to release funds. As they will ask for the purpose of same.

BTL mortgages also have hefty arrangement fees.

peter_steele

HI
thanks for quick reply. I think it will be easy to remortgage in my case. At the moment I have only 18K outstanding on my Flat 1-mortgage and I am considering two options:

1) remortgage to about 60 K (borrow an additional 42K). This will allow me to pay flat 2 fully in cash. This should be easy to get as Flat 1 is worth approx 200K.
2) keep the mortgage on Flat 1 as is and take a BTL mortgage on Flat 2
any thoughts on which option might be better?