Sell and buy, buy another or let to rent?

James398

I am just completing a lease extension to bring my flat up to 150 years, its a two bedroom maisonette. Market value should now be 220-230k instead of 180k it was valued at a year ago for remortgage purposes (with the short lease).
Its mortgage as interest only for 128k @2.54 £270 a month. I am still within a 2 year fixed deal. I get £750 in rent no fees, tenant wants to stay.
I have a job which pays just under 25k plus overtime. I am also owed around 70k and being paid back about £1500 a month (wont go into details).
After paying the lease extension I have 15-20k in the bank.
I am still living at the parents and have minimal outgoings.
My aim now is to live in my own place, but not the flat I own (doesnt appeal anymore).!
So what is my best option?
Do I sell and buy somewhere else?
Borrow more on the mortgage based on increased value in order to buy a second property?
Leave things as they are and rent somewhere using the money I'm owed?
​​​​​​​Any advice appreciated

00ec25

as you probably know a BTL mortgage requires at least 25% equity, so with a new value of 220k you would only be able to raise a further 37k from mortgaging the flat up to the hilt. Take care that the interest charged on that extra borrowing may not be allowable for tax purposes since the charge is capped at the value of the property when first let, which may be 180 (or lower?).

You appear to have a good safety margin in terms of interest cover at 270 v 750 and thus will be able to stomach the interest rate increase that is inevitable. So the income stream looks reasonable and presumably the flat easily covers its own costs and is probably profitable?

so the question is what can you purchase with 37k cash deposit and a residential mortgage borrowing power of 25k salary?

obviously as the flat is interest only selling it off will not significantly alter your financial status as it won't release equity.

James398

37k would not be enough alone but maybe added to 20k i have in the bank it could be possible. On a basic wage i can borrow up to 110k but this increases with overtime ( hence how i got 128k in the first place).
It would give a budget of 167-195 roughly.

If i sell it for 220 i'll have 92 equity. That would give me a budget of 200-230.

Car1980

Keep it simple. Pool your money and buy the house you want to live in

Pixie5740

You can change your user name but that won't alter the fact you've been asking the same question repeatedly since 2012.

Let to Rent

Letting to Rent

Getting my own place

One BTL, what next?

Just sell the bloody BTL flat and buy somewhere to live.

Thrugelmir

Is your lender aware that you are letting the property?