Buying a second house using first house as deposit advice.

Adamjownz

Hi,
Advice needed. I currently have a property that i rent out. I bought it for 89.5k and have about 50k left to pay on it. The mortgage payments are being fully covered by the rental income.
I am currently living in rented property myself and pay £470 per month.
I am now wanting to buy a second house to live in worth about 150k but my money for deposit is tied up in my house that i rent out that i dont want to sell it.
I would like someone to tell me if its possible to kind of use my house i rent out to use as deposit or the money thats tied up in it to buy a house for myself to live in?
Thanks.

Contemptuous

You could potentially borrow additional funds on the rental property mortgage in order to provide the deposit for your main residence.
Perhaps consult a broker?

Let_Us_See

How much rent do you currently receive?

Adamjownz

I receive £440pcm.

stephenni1971

Adamjownz wrote: »

I receive £440pcm.

Which could potentiall support a BTL in the low £80,000 bracket. What is property value? As you will need to leave at least 20% equity in it

Adamjownz

I havnt had the house valued but from internet research i would say its held its value at 90k.

Caz3121

Are you currently on a BTL or consent to let?...if the latter you would need to consider the rate increase on moving to BTL

Mortgage_Mark_2

All irrelevant answers - to answer your initial question; no - you cannot use equity in another property as deposit when buying a new property, unless you're either selling the property or re-mortgaging it to release that equity. You need cash.

Even if raising funds by way of a remortgage; you can only go to 75% LTV on a BTL for this purpose, so you'd be able to take out a maximum of another c.£17,500, assuming the value is £90,000.

Adamjownz

Thank you mark straight to the point.