mortgage secured on two properties? options?

jkm1975

hi,
is anyone aware of a lender that can offer a mortgage which is secured against two properties?

i have a leasehold flat that is virtually paid up and i would like to keep it whist also purchasing another property. it will take all my savings to end the existing mortgage and also extend the lease by 90 years (up to 162 years)

once the flat is paid up i can use the rental income to contribute to the mortgage on my new home.

the problem is that if i go down this route i will have no savings for a deposit, also the new house is valued about 40k more than my flat.

although i will have capital/equity in the flat to the tune of c£120k, will any lenders take this into consideration, effectively securing shortfall in value between the new home and that of my flat?

i would like to avoid having two mortgages if possible, i know it is the same amount of debt whichever way you look at it.

thanks for any advice

kingstreet

There might be one or two lenders left offering cross-charge facilities, particularly among the smaller building societies where I placed my last case.

I'd talk to a broker and establish if this is the right route.

jennifernil

Not your preferred route I know, but if you will be renting out the flat, would it not be more sensible and tax efficient to remortgage the flat on a BTL mortgage for as much as is allowed/will give you a good interest rate? Interest on this mortgage can be set against income from the rent for tax purposes.

Then you use the equity released, plus any remaining savings after extending the lease, as the deposit on your new house. With a larger deposit you would get a better interest rate.