Is the unsecured loan counted towards your loan to value amount?

costelloe16

I'm trying to work out what percentage of my house I have, and whether I can change my mortgage.

If I bought my house for £100,000, with £80,000 mortgage, and £20,000 unsecured loan, would that mean I have an 80% mortgage, or 100% mortgage? I'm not sure how they see each part.

I want to swap to a buy to let morgage, and they said I need to get a valuation of the property, and that they'd only allow if I had 75% of the valuation. Those figures above are very simplified and don't take into account what I've paid off, but are close to the actual figures so I wondered if that would mean I was within 5% of the amount needed, or 25%!

TrickyDicky

If the house was actually worth £100k, which it probably now isnt if you purchased in the last few years, then you would have 80% LTV. But the unsecured loan would count against your affordability when they re-assesed your finances. So you are more likely to be rejected even if you have the required LTV.

CLAPTON

if the house is worth (i.e. valued by the mortgage company ) at 100,000 and they will give 75% BTL then that means they will only allow you a £75k mortgage;
so if you owe more than that on your current mortgage then they probably won't allow you to swap.