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Is it a good idea?
ruthber
Posts: 270 Forumite
Is it possible to mortgage your current home to fund a buy-to-let?
Our situation: we have paid off our mortgage and now would like to buy a flat to let. We have £50K deposit and would like to borrow about 150K (our house is worth £400K) Residential mortgages are cheaper than BTL, but obviously our house will the be potentially at risk if anything goes wrong? Can it be done, Please?
Our situation: we have paid off our mortgage and now would like to buy a flat to let. We have £50K deposit and would like to borrow about 150K (our house is worth £400K) Residential mortgages are cheaper than BTL, but obviously our house will the be potentially at risk if anything goes wrong? Can it be done, Please?
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Comments
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Yes. The amount you can borrow will be subject to your personal income and affordability, not the rent on the property to be let.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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Why don't you get a BTL with the 50K as a deposit and then have a mortgage on the BTL. You could buy up to 200k (25% deposit required) then you don't have to remortgage your own house and you get to offset the mortgage interest payments against your tax liability.
Would seem the easiest and most tax efficient way of doing this unless you wanted to buy a place at more then 200k0 -
You can offset interest on a loan for the full purchase price of the BTL property, regardless of what it's secured on.
Seek professional advice from an accountant or other tax specialist for confirmation.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 -
thank you for quick replies. So in principle it should be possible and cheaper for us but need to get advice on taxation.0
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You need to consider the advantages and disadvantages based on your individual circumstances.
Term, interest only, income/affordability, rental income, fees & costs should all be compared prior to making a decision.
An independent broker would be your best first port of call for a proper comparison.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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