We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Repayment mortgage against home or interest only against second property
mr_auspicious
Posts: 57 Forumite
Hello
I am considering borrowing so I can extend into my loft to add a new bedroom with en suite, for the extra space and to add value to my home.
I have a second property I rent out that has a large buy to let mortgage on it, that I am in the process of fixing at a low rate for five years with a new provider. It is interest only.
Because of the low Ltv and because the rental income comfortably covers the repayments I am considering asking for some extra borrowing to pay for the extension in my home. I'm confident it would be approved as long as they are happy to lend for work being done on amother property to the one being lent against
The other alternative would be to borrow against my home, which is effectively mortgage-free, at a lower rate, but on a repayment basis. The mortgage payments would be higher but I would benefit from having repaid 20% of the capital at the end of the five year fixed period (unless I have this wrong)
It's tempting to borrow against and repay from the rented property as I'll end up with more money in my pocket in the short term. I will also avoid two fees, as much as £900 for a mortgage against my home
Any advice on which course to take would be gratefully received
I am considering borrowing so I can extend into my loft to add a new bedroom with en suite, for the extra space and to add value to my home.
I have a second property I rent out that has a large buy to let mortgage on it, that I am in the process of fixing at a low rate for five years with a new provider. It is interest only.
Because of the low Ltv and because the rental income comfortably covers the repayments I am considering asking for some extra borrowing to pay for the extension in my home. I'm confident it would be approved as long as they are happy to lend for work being done on amother property to the one being lent against
The other alternative would be to borrow against my home, which is effectively mortgage-free, at a lower rate, but on a repayment basis. The mortgage payments would be higher but I would benefit from having repaid 20% of the capital at the end of the five year fixed period (unless I have this wrong)
It's tempting to borrow against and repay from the rented property as I'll end up with more money in my pocket in the short term. I will also avoid two fees, as much as £900 for a mortgage against my home
Any advice on which course to take would be gratefully received
0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.7K Banking & Borrowing
- 253.4K Reduce Debt & Boost Income
- 454K Spending & Discounts
- 244.7K Work, Benefits & Business
- 600.1K Mortgages, Homes & Bills
- 177.3K Life & Family
- 258.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards