buying a property to rent

loosefingers

hi

I currently have a mortgage of about 87k outstanding and the property is worth about 200k

i have seen a property that i would like to purchase for the rental market which is at about 87.5k

however this is a cash purchase property only

am i right in assuming i can remortgage for 180k take 87k and buy this other house outright and still have my mortgage on repayments with out having to go down the buy to let avenue

any help or advice would be greatly appreciated

kingstreet

90% may be a bit high for some lenders for a capital raising remortgage.

Establish you can offset the increased mortgage interest payments against the rental income. HMRC says it doesn't matter which property the loan is secured on, it's only the use of the funds, but in practical terms professional advice should be taken before proceeding.

Don't forget only mortgage interest is an expense. Capital repayments come out of "taxed" income.

G_M

In principle yes, you can raise the cash on the equity in your own home (at more advantageous terms than a BTL).

Obviously the amount you can raise depends on your income, the LTV etc.

Provided you can clearly show the extra cash raised was used on the rental, you can offset the interest against tax on rent - note:
* only the interest and
* only the amountof the mortgage spent on the rental, not the whole mortgage!

New Landlords (information for new or prospective landlords)