Is it possible to get a 100% mortgage using current house as collateral?

sident1972

Hi everyone,
I am in the Forces and am renting out my house (with mortgage lenders permission) I have about £30k in equity in the house. Due to a short notice change in circumstances I now need to buy a house but have not had an opportunity to get a deposit together. I want to keep my current house as an investment and buy a second one as our family home. Is it possible in the present financial climate to get a 100% mortgage using the other property as a guarantee instead of a deposit (sorry don't know the technical terms). We both work, are debt free (I know shocking for a squaddie!) and can afford both mortgages if the first house was not being rented.
Any ideas or help would be most gratefully received.
Thanks Si

kingstreet

It's known as a cross charge and I can't think of a lender offering the facility, off the top of my head.

I've heard of people having more than one property on a One Account Mortgage, but this will involve you remortgaging to them first and I have no idea if your loan to value will be too much.

There are Family Assist type products where a family member puts up their property as security for 25% of the new property value, but I've never tested the idea of using your existing property for that purpose. Again, the equity may simply not be enough to do that, even if it was acceptable to a potential lender.

sident1972

Thanks for the response Kingstreet, we are quite lucky that we can still live in forces accommodation but unfortunately it is about 200 miles in the wrong location! Looks like we will have to start saving!

Wh05apk

You MAY be able to increase the mortgage on your first property, however lenders will impose restrictions if it is a second property, or depending on the use of the funds, so you may find they will restrict the additional borrowing to 80/85% of the value.