Moving mortgage to another property / deeds change

bluejemima

Hi.
I own a flat which is currently rented out. The flat is in my name only as is the Nationwide tracker mortgage secured on it with approx 80k left to pay over 25yrs. This flat is declared through my tax return (rental income etc.).
I live with my husband and son in a house which is mortgage free. The deeds on this house are solely in my husbands name.
When I took out my mortgage on the flat I was earning a good wage. I am now self employed and earn approx 7k per yr. I look after my son as he's preschool age. My husband is also self employed but earns approx 40k per yr.

Having spoken to a broker and our accountant it's been suggested that we move the mortgage so it's secured against the house rather than the flat, as we could get a better rate due to it not then having to a buy to let mortgage. It would also be less than 50% of the house value.

So my question is what's the best way to go about this? Would we need to apply for a new mortgage (I guess based on my husband's income)? Do I need to be added as a name to the house deeds and then "move" the nationwide mortgage? Would my husband's name need to be added to the mortgage? Could it still only be declared through my personal tax return?

ACG

Your accountant has suggested that? Have they taken into account you can use the interest payments on the BTL mortgage to reduce your tax liability on the BTL?

If they have and its still cheaper, then it would just be a case of applying for a brand new mortgage on the residential and the reason for borrowing would be to pay off the BTL mortgage. Im sure your broker will be all over it but just be careful on the LTV you go up to, some lenders would class this as debt consolidation and may not go above a certain LTV.

TrickyDicky101

ACG wrote: »

Your accountant has suggested that? Have they taken into account you can use the interest payments on the BTL mortgage to reduce your tax liability on the BTL?

.

They can still offset the interest against BTL income - the mortgage does not need to be secured against the rented property.

ACG

Really?
I love this forum... everyday is a school day.

TrickyDicky101

This couldn't be done in all circumstances, but there is a clear and transparent link between the business revenue (ie the rent) and the capital needed to generate it (ie the mortgage) so expensing the interest should not be a problem with HMRC.

kingstreet

Yep. It's the purpose to which the borrowed funds are put, rather than the security used, which determines if the loan interest is "relievable" or not.

bluejemima

Thanks. I'll get back to the mortgage guy and see how / what's the best way to proceed. We want to keep it that the rental is my income solely so need to check we can do this depending on how we'd need to sort moving the mortgage.