Second property mortgage help needed!!

Gg1295

Good afternoon everyone,

Does anybody know whether if switch to a buy-to-let mortgage from my current residential product, if this will allow me to release equity? (to pay off my help to buy equity loan and to bolster a mortgage on a second property)

I am mid-way through a 5yr fixed mortgage but I have been told by my lender if I stick with them I won't incur any early repayment charges.

Secondly, in parallel to switching my current mortgage, can I apply for a new residential mortgage for a second property without my current mortgage being considered in the affordability equation?

Thank you v much!!
Greg

Caz3121

BLT mortgages are usually around 75% LTV. Whether you will be able to take money out (or indeed add money in) will depend on the figures - if you bought with 5% deposit, 20% HTB and 75% mortgage, unless the property has increased in value by at least 20% you may need to add money in rather than be able to release anything.

GraceCourt

Gg1295 said:

Does anybody know whether if switch to a buy-to-let mortgage from my current residential product, if this will allow me to release equity? (to pay off my help to buy equity loan and to bolster a mortgage on a second property)

Sorry Greg, not sure about this first bit...

Gg1295 said:

Secondly, in parallel to switching my current mortgage, can I apply for a new residential mortgage for a second property without my current mortgage being considered in the affordability equation?

The problem here has been the long-running dispute between the Financial Conduct Authority and the EU about whose fault it is that here in the UK "mortgage prisoners" are unable to switch to a mortgage product that will save them a significant amount of money every month because "according to the affordability rules, they cannot afford the repayments on the new product"!

The FCA has been blaming the EU for making the affordability rules into law, and the EU has been blaming the FCA for not interpreting the EU law correctly: meanwhile, tens of thousands of "mortgage prisoners" (Google the term for more information) have needlessly been paying out hundreds of pounds every month.

Recently, changes have been promised, but still nothing whatsoever is happening, even though we're no longer in the EU.  That's the long way, I'm afraid, of saying that the "affordability rules" mean that your current mortgage has to be taken into consideration - even if, overall, it makes financial sense for you to go ahead with the new product(s).  We had two buy-to-let properties that we had to sell - thus REDUCING our monthly income - because of these insane rules, in a period of ever-plunging interest rates.

Gg1295

Hi Caz,

thanks for the reply! I understand... By my calculations, I will be able to land at 75% ltv on the BTL. I also have further capital with my partner to fund a 85% ltv residential mortgage. 

My main concern is whether I will be in a position to release equity and if so, whether I can pay off the help to buy loan whilst applying for a new residential mortgage. 

Thanks!

dimbo61

Complex so one for a whole of market mortgage broker who deals in BTL mortgages.

haras_n0sirrah

As long as you can leave 25% equity behind and pay off the htb then yes there is no issue turning your existing property into a let to buy. You will need 15% deposit on your onward purchase. One for a broker. If you dont have one some of us who post here are mortgage brokers and we are identifiable by our signatures. We are not allowed to approach posters but can respond to pm's asking for help. Why not read the boards and pm a broker who you feel can help