Natwest interest only

330d

TrickyDicky101 said:

That's a £200k deposit - but where are you sourcing the cash (equity) from that is contained within this 2nd home?  Are you taking additional borrowing on it, for example?

Oh ok. The 2nd home has a large equity in it already, the majority of the mortgage has been paid off on it. 
Very confusing! 

TrickyDicky101

330d said:

TrickyDicky101 said:

That's a £200k deposit - but where are you sourcing the cash (equity) from that is contained within this 2nd home?  Are you taking additional borrowing on it, for example?

Oh ok. The 2nd home has a large equity in it already, the majority of the mortgage has been paid off on it. 
Very confusing! 

Right, so are you increasing the mortgage on this 2nd home to extract the cash to put down on this other home you are looking to purchase?

[Deleted User]

The Natwest interest only criteria you are quoting is for people who have no repayment vehicle and intend to sell their main home and downsize at the end of the mortgage term.   If this was the case you need to start with at least £200k in the property to do full interest only. 

This doesnt apply to you as it sounds like you have a repayment vehicle (the sale of a 2nd property?) 

Natwest will assess the suitability of this repayment vehicle when they assess the case. This will largely by down to underwriter discretion based on the details.  Sale of a 2nd property will (in theory) allow all the equity in the 2nd property to be offset against the interest only on your new property. 

So, If I am correct that you are trying to use the equity of a 2nd property, the £200k thing doesnt apply 

330d

Deleted_User said:

The Natwest interest only criteria you are quoting is for people who have no repayment vehicle and intend to sell their main home and downsize at the end of the mortgage term.   If this was the case you need to start with at least £200k in the property to do full interest only. 

This doesnt apply to you as it sounds like you have a repayment vehicle (the sale of a 2nd property?) 

Natwest will assess the suitability of this repayment vehicle when they assess the case. This will largely by down to underwriter discretion based on the details.  Sale of a 2nd property will (in theory) allow all the equity in the 2nd property to be offset against the interest only on your new property. 

So, If I am correct that you are trying to use the equity of a 2nd property, the £200k thing doesnt apply 

Yes correct!! I do indeed have a repayment plan which is the sale of the 2nd property. 

So in conclusion, i am looking at a £240k mortgage on the new home. But I have this amount of equity in property 1. Therefore as you say, I also believe the £200k does not apply to me.

[Deleted User]

Yes you are correct.  You can use the whole value of property 1 to do an interest only mortgage on property 2 (subject to meeting the rest of the interest only criteria)

No 200k equity required.  Just 25% deposit for interest only I think 

amnblog

I read 'The house I am looking at is £350k and I will be putting down a £110k deposit.'