Offset buy to let

baloooo2

Hello all
Does anybody know if I can get an offset buy-to-let mortgage if I don't have another property to secure against the loan?

Our situation is this: We own a one bed flat which we moved out of when our baby was born. We're now renting a 2 bed and renting out our own flat on our pre-existing mortgage (with consent of lender). We have quite a lot of savings which we don't want to use to pay off the mortgage because we want it as a deposit to buy a house in the next 2 - 3 years (our current flat lost a lot of value in the crash and we don't want to sell it at a loss). When I've looked around for alternative mortgages, it seems nobody will give you a BTL if you don't ALSO own the house you're living in at present. Ironic for us, as the reason we can't buy a new house at present is because we're stuck with the high interest on the flat we're renting out!

Any ideas greatly appreciated!

Thrugelmir

baloooo2 wrote: »

Ironic for us, as the reason we can't buy a new house at present is because we're stuck with the high interest on the flat we're renting out!

Any ideas greatly appreciated!

If you are paying high interest. Then better to use your savings to reduce the mortgage on the flat. This will then improve the available equity in the flat.

Don't hang onto the flat just because it's showing a loss. Look at your finances as a whole. With a long term objective. Sometimes better to cut your losses and move on. As you may not see a positive return for some time.

kingstreet

You are an experienced landlord.

You should not have a problem with not living in an owned property. That normally only applies to those who do not own a property at all.

I don't know of any BTL products which offer offset. BTL is a business and mortgage interest is an allowable expense for tax purposes.

I don't understand the problem. If you are letting your current owned property, you simply find a new purchase and apply for a new mortgage. Some lenders will need a minimum 15% or 20% deposit, but will ignore the let property in the background if it's self-financing.

Are you trying to buy a main residence, or do you want another let?

baloooo2

Thanks for your responses.
kingstreet - we don't want to get another mortgage / house yet as we haven't saved enough for the deposit. We've just saved enough that it seems daft for it to be sitting in a savings account with rubbish interest while we're still paying off the other loan.

thrugelmir - you might be right. But we're convinced that the area is rapidly improving and we could sell at a much better price in a few years, so we want to keep it as an investment if we possibly can.

Which all brings me back to my original question - can I get an offset buy to let anywhere?!

Thrugelmir

baloooo2 wrote: »

Which all brings me back to my original question - can I get an offset buy to let anywhere?!

You've answered your question.

When I've looked around for alternative mortgages, it seems nobody will give you a BTL if you don't ALSO own the house you're living in at present.

Hard to see any demand for offset BTL anyway. As BTL is business rather than residential lending. As Kingstreet says. Interest is tax deductible. So offsetting will merely increase tax liability.

What rate of interest do you currently pay on your mortgage?

kingstreet

So, you're trying to remortgage the current property you have let?

You want a BTL offset remortgage?

How much equity do you have in the property?

Thrugelmir

kingstreet wrote: »

So, you're trying to remortgage the current property you have let?

My reading is that the OP is paying a high rate of interest on their current mortgage. They are currently building a deposit for their new property. So wish to offset the money until such time they wish to utilise it.

kingstreet

Yes.

I think the OP is going to tell us it is a remortgage, but there's no equity in the property which is going to make a BTL remortgage impossible, as the maximum loan to value will be 75%, maybe 80%.

So, the offset issue is going to become moot, as a remortgage of any kind is unlikely to be possible.