Should i release equity on BTL mortgage?

navarato

Hi all

My current BTL mortgage is coming to an end in three months time. At the same time I wanted to release some equity from it (for refurbishment work on my own house) , but am in two minds due to the current situation with house prices.

Some background:

I brought the BTL house for £250k 2 years ago.
Current mortgage balance £177K
Currently on a 5.69% fix, current £1172/mth repayment.

In the last six months, houses on the same road have sold for £235k, £257k and £315k (slightly bigger than mine as has two extra rooms).

My BTL house was valued at £250k by the bank 2 years ago. Now, potenially it could be revalued less due to current economic climate. What should i do...go ahead with the revaluation or forget about the equity release? Any advice would be appreciated. Thanks.

kingstreet

You're likely to get what, 80% maximum on a BTL remortgage?

What's 80% of £250k, if it's worth what you paid for it? £200k?

If you owe £177k and the maximum you can get is £200k that leaves you £23k, minus charges and fees, even less if the property gets downvalued.

Will the rental income be enough to cover the increased mortgage payment at, say, 125% of the monthly interest-only amount?

navarato

good point..

rent is £1400/pm

been offered to remortgage at 5.99% 5 year fix deal