Rental property equity release

Paulie29

Hi
I have a house that I rent out and would like to release some cash out of it.
The house is valued at £175k and the mortgage is £123k on it.
We have a repayment mortgage at 4% on the property although it is not a buy to let mortgage.

Would I be able to release any Capitol out of this property ?

Cheers.......

ACG

You might be able to raise a little - im talking maybe £7k at best.

However, it would all need to be put on a BTL, you would have to pay probably £1-2k in arrangement fees and the rate would be higher.

You could also maybe look at a secured loan but again, the interest rates would be pretty high.

I would be very reluctant to do it myself.

kingstreet

What's the rental income?

You'll get a normal maximum of 75%, leaving you a gross £8k, less fees and other costs.

You need the rental income to be 125% of the monthly mortgage interest, at perhaps 6%, so the rent needs to be £820 or more for a viable proposition.

You'll also need to be an owner-occupier and have a decent personal income too.

Wh05apk

all of course assuming the lender values the property at £175k!.......................

Paulie29

Ok. Cheers for your advise, think ill just leave things as they are.

susanmarie

You can release equity from rented property, but I think the first problem you are going to have is that your rental property should really be on a BTL mortgage (or you can ask the lender for "consent to let" which I what I have done, although I am not sure if they all do this, it costs me £125 per year for the consent to let which is less than it would cost to remortgage on to a BTL.

Once you have that sorted, you can look at some like: http://www.ascotequityrelease.co.uk/equity-release-landlords

kingstreet

He may already have consent to let. If he plans to change the mortgage from one lender to another, it doesn't really matter if he has CTL now, or not.

The OP isn't looking for "equity release" in the true sense of the phrase. He's just looking to borrow money.

As has been said, his current LTV is too high for a remortgage to be worthwhile and well over that for equity release.