Buying 2nd Property - mortgage

weblues

I have a property that has 20k mortgage left on it (property is worth 100K) meanwhile we are saving up a deposit to buy a second property (we will be living in both)

Is it better to pay off the existing mortgage (at 3-4%) or save all the money for the deposit - currently we should have enough for a 25% deposit if we don't pay off the existing mortage we would have anout a 15-20% deposit if we dont.

Any mortgage adviser out there to advise on what would look more favourable when applying for the mortgage, is it better to have a 100% pay off property or a larger deposit. I would be trying to use my current property a mortgage collateral.

silvercar

Any mortgage adviser out there to advise on what would look more favourable when applying for the mortgage, is it better to have a 100% pay off property or a larger deposit.

Larger deposit.

The lower the LTV the better rate you will get. So if you can get both under 50% LTV the lower mortgage deals you will get. The only time I would say that would not be best is if you were hoping to extend your existing mortgage to purchase the new property outright and you could get a good deal on your existing mortgage.