Buy to Let Mortgage

Inger

I have a flat which is rented out, currently on my old domestic mortage. I'm trying to work out whether to transfer to a buy to let mortgage and take some money out to re-invest in another property, thus spreading my investment. The current mortgage is c25% of the value and I would take it up to c60%. My income from the rental will go down as my costs will go up. However unless I invest the extra mortgage value in to something that will increase in value I will lose out, but how much? Clearly there are tax benefits to earning less in rental, but is there a calculation/view on this?
Any thoughts would be very welcome - it's a minefield!

holly_hobby

You won't be able to release equity under your domestic mge whilst its subject to consent to let (assuming that you do have consent to let ? ).

You will have to switch to a traditional buy to let mortgage to release the equity you desire. (there are various BTL lenders, some High St names, who are currently offering fee free (basic legals & survey) remortgage deals.

Tax offset wise - you are able to offset the interest on your new BTL increased mortgage, upto the value of your original purchase price of the property. It is the interest element only that remains tax deductable off your gross rental income.

Min income on BTL is 25K (apart from 2 B Societies who don't have min inc requirement).

You also have a decent LTV at circ 60% (subject to valuation), and currently letting - so you won't be considred a first time landlord - which will also help open up more available lenders to you.

Suggest you have an appointment with a whole of mkt mortgage broker, to have them source the most suitable lender and deal for your requirements - and from the basis you have noted (subject to variants), there should be lots of choice for you.

Hope this helps

Holly