Can I afford a second home.....

londoner_2

I currently have a mortgage of 178k (equity of approx £140k) and have savings of 150k which I currently offset. I would like to move home and although my property is not on the market, I've seen a property for 410k. I am toying with the idea of buying the desired property WITHOUT selling my current home and raising the mortgage repayments (interest only) by renting? My current property has a rental value of £1100pm. I would consider selling my house at the conclusion of a six month rental agreement. Is this something I should investigate or just wait until I sell my home??

Our joint income is £50k.

dimbo61

well you need to speak to your current lender and see if they will give you consent to let for upto 3 years!
Now £178,000 mortgage at 4% interest only is £600 a month approx
But will your current lender lend you £250K which is 5X your joint income to buy the new property
Now a £250K mortgage repayment would be £1320 a month at 4% so can you afford this.
Your lender may want to hike the interest rate on the existing property you wish to rent out ( more risk for them) and the reason I say 3 years is that you need to sell before the 3 years are up or you pay capital gains tax.
Speak to a whole of market mortgage broker and then your current lender