Pay off Mortgage or Use the Deposit on another House?

PierremontQuaker03

Hi, I have 25k in savings and a mortgage outstanding of 25k.
The house value with the 25k mortagage is 140k approx.

I am looking at buying another house and renting my current property and borrowing as much as I can against my current home.

Anyway my question is would it be best to pay off the mortgage completely on my current home and then it would give me the freedom to go to a broker and another mortgage provider (I know I am free to move anyway). Or would it be best to put this 25k as a deposit on the new house.
Either way I want to leverage as much debt as possible (75%) against the property I will be renting out.
Also if I did pay off my mortgage that would leave me with very little cash, how would this be seen by a mortgage provider, even thou I would have a paid for home behind me.
I earn 40k per annum and the House I am looking to buy will cost me 215k approx.
Thanks

PierremontQuaker03

Hi sorry to repost but I am at a point where I need to make a decision any thoughts any one?

purcel

As far as I can see, your £25k deposit will be tight for the 215k house, as you will need at least 10%deposit plus a bit more to cover fees, stamp duty, etc. Have you spoke to a mortgage provider to see if you will be able to borrow 90% of the house value at your salary?

If you do pay the mortgage remaining on your house, then you will save the interest you would, otherwise pay if you don't(hope this makes sense), and you will be free to start saving for your other house.

PS. Sorry, reading your post again , it may be better to put the £25k towards the deposit, imo