buy to let remortage

Dhen

Hi

I am in need of some advice, my partner has recently moved in with me and we have decided to rent his property as this is the only property that we will be renting and he has been paying his mortgage for 20 years and has 16,000 left on it woud he be better off trying to get a loan for this amount. we also have 30,000 debt as well and were considering adding this to the mortgage. We did look at the one account but they don,t deal with buy to let.

any advice would be very much apprieciated

thanks

silvercar

disadvantage in adding debts to the mortgage is that your securing unsecured debt; your home is at risk..........

advantage in your case is that your mortgage interest payments will be allowable expenses against your rental income, so effectively you are getting tax relief on them. this makes them a very cheap way of dealing with your debt.

paulsm

surely he will only get tax relief on the amount of the original mortgage and not any extra added to it?

silvercar

you can get tax relief upto the value of the letted property at the time you started letting it.

Dhen

Can you tell me though if we need to convert to a buy to let, if it is the only mortgage we have or can we keep it as a residential mortgage

silvercar

you could ask your lender for consent to lease as opposed to chainging it over to a BTL; they may say no, in which case you should change to a BTL.

Some people don't bother but they risk getting caught.

whether you change or not, you do need to ensure that the building insurance takes into account that the property is let out.