Remortgage BTL to release equity

mrsw

I'm looking at remortgaging my current mortgage (residential with CTL) to a BTL. The LTV will be 60%.

I would like to borrow 50K more than the current mortgage and use the extra borrowing pay down my mortgage on my home. Are there any lenders that will allow this?

Can it be done by applying direct to the lender or will I need a broker?

To clarify - 60% LTV includes the additional borrowing.

lovinituk

Don't forget you won't be able to offset the interest on the additional borrowing for tax purposes.

silvercar

lovinituk wrote: »

Don't forget you won't be able to offset the interest on the additional borrowing for tax purposes.

Not strictly true. It depends on things like the value of the property when first let and whether some of the loan on the residential house was for the purpose of the letting property.

Not uncommon to buy a property to let with a BTL mortgage on the property being let and a mortgage increase or secured loan on the residential property. All would be an allowable expense as there is no obligation to secure the loan on the property being let.

Cornucopia

The OP is talking about raising funds on his/her rental property. All of that loan will be tax deductible against rent.

The issue is what the LTV comes to after you add 60% + £50k. And only the OP knows...

mrsw

Cornucopia wrote: »

The OP is talking about raising funds on his/her rental property. All of that loan will be tax deductible against rent.

The issue is what the LTV comes to after you add 60% + £50k. And only the OP knows...

Thanks. The LTV will be 60% including the additional 50K. It's currently less than 50%.

Cornucopia

I can't see that being much of a problem. You *can* apply direct to certain BTL lenders e.g. Coventry BS, but to get access to the whole of the market, you will need a broker. If you already know what deal/lender you are after, you can probably choose a free broker without too much risk.

silvercar

Cornucopia wrote: »

The OP is talking about raising funds on his/her rental property. All of that loan will be tax deductible against rent.

Not necessarily, it depends on the value of the property when first let.

kingstreet

True.

The OP can only offset interest against tax on a loan upto the value of the property at the time it was first let, regardless of the property on which the loan is secured.

Seek professional advice if in any doubt about tax treatment of such expenses.

mrsw

Thanks for everyone's advice. I do intend to seek tax advice before going ahead with this.

The lenders I am looking at are Leeds and Natwest. I believe it's possible to apply direct to both. Any views using them for BTL mortgage? Is there any difference in timescales with direct vs broker applications?

Mortgage_Mark_2

I 100% guarantee Natwest will say no.

They don't release equity via BTL remortgages for debt consolidation - and this scenario is viewed by them as debt consolidation - I've had a similar situation recently.

mrsw

Mortgage_Mark wrote: »

I 100% guarantee Natwest will say no.

They don't release equity via BTL remortgages for debt consolidation - and this scenario is viewed by them as debt consolidation - I've had a similar situation recently.

Thanks Mark. Do you know which lenders do allow it?