Buying a second buy to let house

Steve_1976

I rent out a house worth about £100,000 with a mortgage of about £45,000. I wanted to know if I could use this equity in this house as a deposit to buy another house under buy to let?

Thanks.

00ec25

yes you can - if you re-mortage existing BTL at or below current marjet value then the cash (equity) you are releasing can be used as a deposit on a new BTL - or could be spent on anything else you care to spend it on, its just the same as any other loan after all.

if you use it for a new BTL then the extra mortage interest payable on the existing property would be a valid deduction against net profit (ie tax) since the purpose of the loan was to expand the BTL business/portfolio

hazyjo

I presume you'd need to leave some equity in the house still (I believe it's more for BTL) or you'd effectively have a 100% mortgage on the house you're taking the equity from.

Jx

brit1234

Steve_1976 wrote: »

I rent out a house worth about £100,000 with a mortgage of about £45,000. I wanted to know if I could use this equity in this house as a deposit to buy another house under buy to let?

Thanks.

Bit dangerous in this climate. You will be loosing equity then in both properties as house prices continue to fall making it harder to re-mortgage in a few years time. With the housing benefit cuts next month and the austerirty measures rents are likely to fall and void periods set to rise.

I would stick to one buy to let at the moment, you can always look at another one in a few years time when prices have stopped falling.