Remortgaging and Borrowing Extra

marathonic

What are the banks like with regards to borrowing extra on a remortgage? The reasoning for borrowing extra is for investment in a foreign property.

The basic scenario is as follows:

• Salary: £30,000
• PPR house value £150,000
• Mortgage: £90,000
• Savings: £30,000
• Foreign investment property: £60,000

In short, another £30,000 would be needed on top of the current mortgage when remortgaging at the end of the current mortgage deal.

This would result in a £120,000 mortgage which is 4 times salary and 75% of the PPR value (I realise that the bank can't take security against the foreign property).

The figures look good to me as the £120,000 should be affordable, even without the foreign investment property, which would be bought for cash.

However, do banks refuse extra borrowings for something like this - from reading the boards, I believe they have issues if you want to increase borrowings for share investments.

Thrugelmir

The purpose of the additional borrowing may well be an issue.

marathonic

Thrugelmir wrote: »

The purpose of the additional borrowing may well be an issue.

Thanks Thrugelmir. I can see, on reviewing some bank websites, that there isn't a clear-cut answer to the question.

Some banks T&C's appear to allow it and others don't. Looks like this will be a case for a broker.