BTL Mortgage, need help with sums

missis_amber

Please could someone help me understand if this is right.

Current mortgage remaining on property is £68000. House is valued at £200000. So potentially £132000 equity in the property.

If I convert mortgage to an 80% Buy To Let mortgage, how much of that £132k would I need to put down as deposit? 

Then £132k - deposit = money in bank for me to purchase another property? Is that correct too?

Usually I am very smart, but feel like I can't get my head around the numbers! Thank you.

getmore4less

80% of £200k is £160k you need to use £40k of your own money.

Are your a lettings business is wise if you struggle with these sort of calculations.

Working out if you are making money is a lot harder

[Deleted User]

Property Value = £200,000
80% mortgage= £160,000

From this you'd repay the £68,000 and be left with £92,000

You dont 'put down' a deposit, you leave equity in the property.   Same thing but slightly different process.  

FYI, 80% ltv btl mortgages are horrific on the rates and fee.   See if you can make do at 75% and you'll find yourself getting significantly better deals. 


Its unlikely they will give you 'money in the bank' either.   You would more likely tie your new purchase in to a chain with remortgaging your current property.   This is because most lenders require a purchase address for the application and dont allow the remo and purchase to complete separately.  

missis_amber

Thank you @Deleted_User, so I could use the £92k towards purchasing a residential property? 
I spoke to a mortgage advisor but their sums were coming up different whereas mine came up same as yours so wanted to check. Thank you so much.

dimbo61

Well £92,000 is best case.
More likely you need to have a 25% deposit so £50,000 deposit and 75%LTV BTL.
Don't forget the fees that come with a BTL mortgage.
You might have £80/85,000 deposit for your new home.
You also need to earn at least £25,000+ a year with many BTL lenders.

[Deleted User]

Its also based on rental income so if the anticipated rent doesnt stack up then the amount of loan is reduced