Advice on funding buying a holiday let

rewind80

I am looking to be able to clear the mortgage on my apartment in December of this year. I have no intentions of moving so therefore looking at buying a holiday let as an investment property.

From a very brief e-mail chat with a local mortgage broker (literally one e-mail!), because I only currently have savings worth approximately 15% on a deposit, he recommended remortgaging my existing property to help fund the holiday buy to let as you need at least 30% generally.

I'm not looking to do this until early next year and at that point I will seek professional financial advice. However, in the meantime I'd appreciate any information from forum members on how this would work in practice. As my existing mortgage would be zero, would I just remortgage part of the value of my apartment as a deposit? Or would I remortgage it entirely and use that as a joint mortgage for both properties?

Any other advice on buying a holiday let would be gratefully received as this will be my first time buying a property for an investment and will be doing it solo!

Thanks

anselld

If you can get sufficient funds out of your flat to buy the holiday let outright that would be the cheapest option.
Otherwise get as much as you can within reason from the flat which should give you a low LTV on the holiday let.  Mortgage rates on holiday let tend to be higher than BTL which are in turn higher than residential.

theartfullodger

You didn;t ask but I and many others are expecting property prices to drop overall thanks to this world-beating government.  

And interest rates to go up (yes I appreciate you might get a few years on fixed rate).  In November 1979 under Thatcher's iron fist Bank of England base rate hit 17% (seventeen percent..).  I had a for-then large mortgage.  

I was lucky, building society only wanted 15%....

housebuyer143

theartfullodger said:

You didn;t ask but I and many others are expecting property prices to drop overall thanks to this world-beating government.  

And interest rates to go up (yes I appreciate you might get a few years on fixed rate).  In November 1979 under Thatcher's iron fist Bank of England base rate hit 17% (seventeen percent..).  I had a for-then large mortgage.  

I was lucky, building society only wanted 15%....

He didn't ask so no need to speculate.

Best way as broker advises. Remortgage your residential as the rates are cheaper and buy the holiday let outright. You are also less restricted over what you can do with it if you have no mortgage, so could rent it instead if the holiday let idea does not work out.