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Woolwich - CTL / BTL
big_mac_2
Posts: 2 Newbie
My wife and I currently live in a house I bought a few years ago. However we have found a new home. The plan is buy the new home and keep our current terrace (excellent RTV). Although in theory, we can actually borrow enough to cover both mortgages the advisor at Barclays/Woolwich told us we could not do this. We have a 20% deposit for the new house, and the current mortgage is very cheap, however, the equity in out current home is quite low so we can't move straight to a BTL either. Even if we went to a 10% deposit for the new house and used the remainder to pay off our existing property we still wouldn’t have enough to put on a 75% BTL.
If we put the current house on a CTL (assuming we tell them we will sell the property in 2 years / move back in) and take out a new mortgage for the new house. In 2 years we should have enough cash (generated from renting out) to put the house on a BTL. We would then look to remortgage the new house back with the Woolwich and Port our existing cheap rate over. Does this sound feasible? I don't know the rules on Porting a mortgage.
If we put the current house on a CTL (assuming we tell them we will sell the property in 2 years / move back in) and take out a new mortgage for the new house. In 2 years we should have enough cash (generated from renting out) to put the house on a BTL. We would then look to remortgage the new house back with the Woolwich and Port our existing cheap rate over. Does this sound feasible? I don't know the rules on Porting a mortgage.
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Comments
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Only the interest element of the mortgage payment is tax deductible. Profit made letting is also taxable. So the return over 2 years may not be great as your are estimating.
Nor overlook the fact that that letting comes with other costs, also potential void periods or even tenants not paying the rent. This will need to be funded by yourselves.
You will be running a business so will have all the rewards and risks that give with it.0 -
Most lenders will only consider porting a rate on a sale and purchase. Only the odd one will permit a port at other times. You need to ask your lender.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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Thanks for the replies. It seems we can't port post CTL. So have no option but to put straight on an 80% BTL.0
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