Collateral mortgage - do they still exist?

eldaniel

Is it possible to use our own flat when it will be fully repaid to use as a collateral against a mortgage to buy a house? Everyone knows how hard is to buy/sell with all the chains attached to properties etc.

I was just wondering if I do that then I could take offset mortgage with ability to overpay when or how much I want. That would give us time to sell our property without too much pressure to lower the price which in effect could save us substantial amount of money. I.e. We could rent it out for 6 months after we move out and then if we have a tenant on a rolling contract we could sell property not loosing rent money in the meantime.

When we would finally sell our flat for desired price we then could just overpay whole sum on our new house mortgage.

Hope it all makes sense.

Is this possible in the first place and second - is it economically viable?

kingstreet

I know of no lender currently offering a cross-charge facility.

You will need to remortgage the flat if you want to use the equity for the deposit for the new purchase.

Thrugelmir

Too many what if's in the scenario. Mortgage lending simply isn't priced for such complexities. Nor are lenders geared up to administer such arrangements.