remortgage and buy in Hong Kong?

ukaser

Hello.
I live in Hong Kong and own a small apartment in the UK.
Currently my mortgage is around 55k and the value around 80k.
I have a tenant in the UK and have no plans to return and live in that apartment.

I'm considering remortgaging my apartment in the UK and changing to an interest only rate in order to get access to some of the money in there in order to buy an apartment in Hong Kong.

I am confident in the property market here, not so much the UK and believe I will make greater return on ownership here - not to mention, lack of any capital gains tax upon selling.

I am, however cautious of entering into an increased level of debt in the UK, though, I can't see any flaws in my strategy as the money I release would be tied to another, more profitable investment.

Can anyone advise me as to whether this is a good idea or not?
Thanks!

agrinnall

What size interest only mortgage are you thinking of getting? I would expect lenders to be a bit more cautious when deciding what to give to someone who lives overseas. Your current mortgage is around 70% of the property value, I'd be quite surprised if anyone will offer you much more than that.

antrobus

ukaser wrote: »

....Currently my mortgage is around 55k and the value around 80k.....I'm considering remortgaging my apartment in the UK and changing to an interest only rate in order to get access to some of the money in there in order to buy an apartment in Hong Kong...

Your current LTV is 62.5%. I doubt you'd find a mainstream UK lender willing to go beyond 75%, so the maximum capital you'd release would be £10k. Less costs, of course.

How far does £10k go in Hong Kong? I was under the impression that HK was one of the most expensive places in the world to buy property.

agrinnall

It's worse even than the figures you give because the LTV is actually 68.75% (which is why I said around 70%) so even less capital could be released. I suppose that switching to IO may well mean more of the letting income available to be transferred to the OP in HK, but after paying UK tax and SWIFT fees I don't think the OP will be buying a penthouse apartment on the Peak!

Thrugelmir

ukaser wrote: »

I'm considering remortgaging my apartment in the UK and changing to an interest only rate in order to get access to some of the money in there in order to buy an apartment in Hong Kong.

You may well struggle to obtain an interest only mortgage without a repayment vehicle in place.

Releasing equity whilst also asking for consent to let the property would be an issue for many lenders.

BitterAndTwisted

If you're not going to return and live in the property why keep it at all?

G_M

Nothing much to add on the mortgage front, but off-topic I asume you are familar with HMRC (Non Resident [= overseas] Landlord Scheme)

What's HK like these days? I was there pre-handover and never been back......

ukaser

hi guys, thanks for your responses. I've done a little more digging on this and yes, while I can get the money from the bank the property I could purchase would be extremely small. The return isn't worth the interest accrued on the double loans so, I'm gonna leave it!
And @G_M - HK is still good... more british than ever, in fact!
What were you doing over herE?