Remortgage to leave money sitting in bank?

Newheight13

Remortgage is due in month and I want to release equity for a BTL but not our cause just yet. Can I release maximum equity and have the money sitting in the bank for when I property does come of of interest? 

Thanks 

Keep_pedalling

You would be paying interest on money sitting in a bank account and at the same time your money would be loosing real value due to inflation. It does not seem like a sensible plan to me.

Why BTL? Do you have previous experience of being a landlord? If not who much research have you done about your responsibilities as a LL and the risks associated with being one?

amnblog

With most Lender's, yes.

You do, of course, need to be a fan of paying interest to hold funds you are not using.

hildosaver

Terrible idea - you would pay interest on the higher mortgage balance and also lose value on any cash in the bank due to the interest rates being way below inflation.

pjcox2005

As long as you get a sensible bank account the difference on rates will be minimal I expect. 5 year fix c.4% or 2yr 4.5%ish if you have a reasonable LTV.

Easy access saving 3.5% or if you take an account you give 90 days notice then this goes up to 4%.

Assuming we're not talking fortunes and temporary holding then costs will be low so £100k over 6 months may be about £250 and would give you freedom to use those funds as you see fit and potentially move quicker on purchase.

Whether BTL works is another question but presume you've done your homework on that. 

Newheight13

Thank you all. PJCox has my way of thinking. It’s just a 3 month thing and was going to put it in an easy access savings account, to compensate the difference in interest, though of course I’d still be making a small loss on the rates but in terms of hassle and speed it will be worth it. 

As for the BTL market, I’m more than aware it’s a bad time to get involved in this, but couple of options coming up that are worth the risk. Just wanted to see what lenders views were in this. 

Thanks