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!
Can this be done?
cns06
Posts: 299 Forumite
Current house worth £100k.
Mortgage owing £20k with 5 years to run.
Get consent to let for current house and use rent to pay off last 5 years of mortgage.
Take out 75% mortgage on second house that becomes my primary home?
Use savings for 25% deposit.
Any reason I cant do this?
I know the general suggestion is to LTB the first house but as we don't need the equity its a lot of interest to pay (currently on low rate tracker) when we don't need too.
Mortgage owing £20k with 5 years to run.
Get consent to let for current house and use rent to pay off last 5 years of mortgage.
Take out 75% mortgage on second house that becomes my primary home?
Use savings for 25% deposit.
Any reason I cant do this?
I know the general suggestion is to LTB the first house but as we don't need the equity its a lot of interest to pay (currently on low rate tracker) when we don't need too.
0
Comments
-
Forgot to say figures are just an example that's not the actual numbers situation but the %s are similar.0
-
When I got a consent to let a few years ago it was only valid for 2 years. The bank added 1% to my interest rate. If I had needed to let my house for more than 2 yrs I would have had to remortgage to a BTL mortgage.0
-
Rental income (profit on letting) is subject to tax. So not as straightforward as using rent to repay mortgage.
What terms will your lender grant CTL on?0 -
That's a good question. Not 100% sure. I bank at a small non high street bank - I think they adopt a fairly open view to this kind of thing from their side, pretty sure if I asked for 5 years CTL there would be no problem.
Its more can I have 2 residential mortgages I guess on the basis of one having CTL. I.e will a lender - whom I am an unknown - be ok with it. My current bank would lend, I know that already, but I want to move away from them for various reasons.
FWIW current repayment is c.£500 ish. Rents are c.£900 ish.
Current house owes £60k worth £200k.
New house worth £350k, would probably put 25% deposit down.
I would meet affordability for £350k mortgage (i.e c.£470k property value) so if you add up £350k and £200k you get £550k so its over but I only owe £60k. IYSWIM....
Don't know if this is even all possible without converting to LTB.0 -
Yes you can do this but do not assume that it will work with any lender on the new purchase. Some will see the existing mortgage as a liability, some will discount it.
Therefore, if your affordability is tight it could be an issue.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.8K Banking & Borrowing
- 253.4K Reduce Debt & Boost Income
- 454K Spending & Discounts
- 244.7K Work, Benefits & Business
- 600.2K Mortgages, Homes & Bills
- 177.3K Life & Family
- 258.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards