porting Mortgage

vkumar

I have a property 1 worth 180k bought 9 years ago. 2 years ago we rented it with permission to let to move due for job reasons. A year ago we bought a property 2 near the work place. LTV and affordability were no issues. No tie ins and both are life time trackers.
The problem now is the lender says the permission to let in P1 is only max 2 years and I need to move to BTL mortgage. The mortgage product on property 1 is very good and I would like to keep it. I would like to port the mortgage from property 1 to property 2. P1 mortgage is portable & is with Barclays. I understand Barclays may say porting to already owned property 2 from property 1 is not possible. Any suggestions either to keep residential mortgage in P1 or port mortgage from P1 to P2 will be appreciated. The amounts are similar and LTV in both properties is around 50%.
Thank you

Thrugelmir

You cannot port a mortgage to a property you already own.

CTL is totally at the discretion of the lender. The terms will be offered to you. There's no choice for you in the matter.

Who is your lender?

holly_hobby

No unfortunately, as already stated you are only able to port (at the lenders discretion and subject to status checks) on a new purchase.

P1 will now have to be moved to a BTL mortgage, see what your current lender offers & compare this with what is available in the open market (there are some fee free BTL remortgage deals about) - to which you may wish to engage the services of a whole of market broker who will do the legwork for you, and support you throughout the whole application process.

Hope this helps

Holly

vkumar

Thanks for the reply.
P1 mortgage (75K) is with Barclays and P2(88K) is with HSBC.
I have savings in offset in P2 and can borrow more from p2- with both I can pay off P1 mortgage fully to reduce interest burden at BTL rate and reduce the hassle of going thro a BTL mortgage process. If I keep the record of paying the mortgage P1 will I be still be able to deduct the interest from rental profit for tax purposes?
If I do so will I also have difficulty in getting BTL mortgage at a later date as I will use the money not for that property, but to fund say another BTL or pay off some of the resedential mortgage (when the interest rate for BTL and res mort are closer).
A reply will be appreciated.
k

holly_hobby

Apologies for delay in reply ..

You may raise money on a residential mortgage in respect of a let property, and also offset the interest element against rental income, but it is vital(for HMRC purposes) that there is a clear audit trail between the 2 transactions i.e your releasing equity from your residential property to redeem the borrowings on your let property.

Hope this helps

Holly