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.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. 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!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Deposit on a second home - how much needed if mortgage free on first property?
EN1
Posts: 2 Newbie
Hi All,
I am struggling to find any information on the web regarding the amount of deposit needed for a second home if you are mortgage free on your current property. The second home will be our main residence. Does anyone have any idea as to what percentage of the property price we would need to save?
Thanks!
0
Comments
-
Your home is more-or-less irrelevant, except many BtL lenders do want you to be a homeowner.
75% is the usual max LtV for BtL mortgages - so you'll need 25% of the purchase price, whether saved or raised by mortgaging your home.2 -
Thanks but we will not need a BTL mortgage as we are not renting out the second property as this will be our home - we are currently in a rental property due to relocation. Our mortgage free property is our rental property, which is currently occupied by a tenant which was on a BTL prior to paying it off. So my question is what percentage deposit do I need if we do not have a mortgage on any other properties that we own? I hope that makes sense.
0 -
It doesn’t make any difference. It affects your affordability which may impact what you can lend, but there is no ‘oh well you have a house already so you only need a 5% deposit!’2
-
Presumably you have allowed for the extra 3% SDLT (or extra 4% LTT from tomorrow if buying in Wales) for additional properties.2
-
At the very least a 10% deposit. The amount you wish to borrow could be a constraining factor on what you can buy. .1
-
Large deposit gives better rates and terms from lenders. (ie cheaper if you've 25% rather than 10%) Talk to a few brokers, see what they suggest and can offer.
1 -
You need to speak to your accountant ?
Have you considered taking out a BTL mortgage on your current rental property as the deposit for the new main residence ?
I think ( But not 100% sure ) that you can borrow upto 100% of the original purchase price on your BTL and offset 20% of the interest .
So say you paid £80,000 and 10 years later it's worth £125,000 you could take out a 60% BTL interest only mortgage.
Use the £80,000 as a deposit for the new residential property.
The rest would come from a normal residential mortgage which hopefully you should get the very best rates on.2
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.6K Banking & Borrowing
- 254.5K Reduce Debt & Boost Income
- 455.5K Spending & Discounts
- 247.5K Work, Benefits & Business
- 604.3K Mortgages, Homes & Bills
- 178.5K Life & Family
- 261.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards