Sell or remortgage?

aniviel4444

Hello,

I hope you're all well.

I'm fortunate that I have a good sum of money in investments and also own my home outright (mortgage-free).

However, my home is very small and I just started working from home so I decided it's time to start looking at upgrading and moving home.

The places I'm looking at are almost double the price of my current home, so I'll have to use some money I have saved up. But now I'm uncertain whether to actually sell my current home and add a little bit on top of it, or to remortgage / release equity some of it (and rent the flat out in order to pay back the mortgage over time) and then use more from my investments at the moment?

Selling would free up more money for me right now whereas remortaging would give me less so I'd have to part with a larger chunk of my investments...

I have a financial adviser who's looking after my investments and I've been seeing slow growth on most of them, but of course she'd say they need to be longer term. She obviously has a vested interest in me keeping those investments with her, which is why I was hoping for more opinions on this. I know property is safer to "invest in" which encourages me to hold on to my current home and remortgage, but I also understand I can see larger returns on the money investments...

Anyway, I'd love people's thoughts.

K_S

@aniviel4444 Ultimately, what choice will work out better in hindsight will depend on a lot of factors that are largely outside your control and impossible to predict - how your investments do, what kind of capital growth your property might see (or not), etc. By virtue of owning the home you live in, you're already invested in the UK residential property market in a way, so it might be worth considering whether you are comfortable increasing that proportion using the leverage of a mortgage.

If you do a let-to-buy (taking out a BTL mortgage on your current property, releasing cash and using that cash as a deposit on your new residential home) then some things you need to consider are -
- depending on your income levels and the price of the new house, you might not need to touch your investments at all
- assuming you're in England, you'll need to pay a 3% surcharge on stamp duty for the new house
- based on today's market, you're probably looking at a 5yr fix rate between 4.5-5.5% on the BTL mortgage

I hope that helps in some way.

aniviel4444 said:

Hello,

I hope you're all well.

I'm fortunate that I have a good sum of money in investments and also own my home outright (mortgage-free).

However, my home is very small and I just started working from home so I decided it's time to start looking at upgrading and moving home.

The places I'm looking at are almost double the price of my current home, so I'll have to use some money I have saved up. But now I'm uncertain whether to actually sell my current home and add a little bit on top of it, or to remortgage / release equity some of it (and rent the flat out in order to pay back the mortgage over time) and then use more from my investments at the moment?

Selling would free up more money for me right now whereas remortaging would give me less so I'd have to part with a larger chunk of my investments...

I have a financial adviser who's looking after my investments and I've been seeing slow growth on most of them, but of course she'd say they need to be longer term. She obviously has a vested interest in me keeping those investments with her, which is why I was hoping for more opinions on this. I know property is safer to "invest in" which encourages me to hold on to my current home and remortgage, but I also understand I can see larger returns on the money investments...

Anyway, I'd love people's thoughts.