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How much can I borrow?
Newheight13
Posts: 232 Forumite
Hi,
Our current flat is valued around 190k and we have about 100k in equity. We are looking to purchase a house and were wondering what we could lend for new property, using some equity to finance the deposit.
Our current flat is valued around 190k and we have about 100k in equity. We are looking to purchase a house and were wondering what we could lend for new property, using some equity to finance the deposit.
We earn around 70k between us but we would also rent out our flat, which we know based on others in our block will rent out for 1k PCM. We have no other debts.
Can anyone advise what we could borrow towards new property whilst keeping current property?
Thanks!
Can anyone advise what we could borrow towards new property whilst keeping current property?
Thanks!
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Comments
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Just rough figures here but you could take around £50k out of the current property when you remortgage it to a BTL and then an additional 4.5x £70k = £315k you could borrow (not lend) on a new residential mortgage giving you around £360k to put towards the new property.
Don't forget the additional 3% SDLT you'll have to pay on your next purchase.1 -
Or 4% in Wales and Scotland2
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@newheight13 It looks like you are considering a let-to-buy (letting the current flat you live in while remortgaging it to a BTL and using equity raised as a deposit on an onward residential purchase).Newheight13 said:Hi,
Our current flat is valued around 190k and we have about 100k in equity. We are looking to purchase a house and were wondering what we could lend for new property, using some equity to finance the deposit.We earn around 70k between us but we would also rent out our flat, which we know based on others in our block will rent out for 1k PCM. We have no other debts.
Can anyone advise what we could borrow towards new property whilst keeping current property?
Thanks!
For the flat, with a rental income of 1k, you may be able to release up to 75% LTV (so about 42k) at mainstream rates and 80% LTV (about 52k) at higher rates.
For the onward purchase, with an earned income of 70k and no background debt, you may be able to borrow between 4.75x-5.5x, the lower end at mainstream rates and the higher end at specialist rates so in the range of 333-385k.
To boost your borrowing on mainstream rates, a couple of lenders may consider using the prospective rental income for affordability.I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
PLEASE DO NOT SEND PMs asking for one-to-one-advice, or representation.
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