Combine Residential and BTL Mortgages into one, paying off the BTL

morlandbanks

Is it possible (or advisable?) to use the equity in my home (75%) to pay off the BLT mortgage on my other property ( 42%) and combine our debt into a single mortgage? We have more than enough equity in our main home (about 3 times the value of the BTL loan) to be able to pay off the BTL balance in full. 
Has anyone done this?

dimbo61

Yes we have done this !
We took out a residential  mortgage on our home and used the funds to pay off our  BTL IO mortgage.
A better question would be WHY ?
Cheaper rates on residential mortgage compared to BTL deals.
You can still offset the Interest part of  ( some ) of the new mortgage balance which you have taken out to pay off the BTL.
We are also reducing out debt every  month. 
Interest rates for normal mortgages can be 5/6% while some BTL rates are 8/9/10% 

silvercar

Definitely worth doing if the rate is cheaper. The interest on the amount borrowed for the BTL is still an allowable expense of the rental property wherever (or indeed if) it is secured.

the only word of warning is that your home is at risk if you fail to keep up with mortgage payments…. But you know that anyway

morlandbanks

Why is a good question!
Our BTL is on a repayment mortgage currently. We wanted to try to get it paid down ASAP. I think because we've always had repayments on our residential mortgage and I like the idea of getting everything paid off. I can't honestly think of a good reason not to just re-mortgage the BTL on an interest only basis. We could even use the profit from rent then to pay down our residential mortgage by overpaying. A lot to think about!