We have equity in our home, can we buy a second property?

poseidon1

RedfordML said:

Both myself and my partner are in our 40s and we have built up around £190k equity in our home and just wondered if we could somehow use this to put towards a second property, to rent out and long term become a retirement nest egg. 

How do we go about this? Or is it not possible? 

We have a 750pcm mortgage, we have joint earnings of 90k. Our current home is valued at £325k and we have a 140k mortgage left to pay. 

Any advice would be great. Thanks 

You asked exactly the same question in March last year below -

https://forums.moneysavingexpert.com/discussion/6517332/equity-in-home-is-this-possible#latest

I doubt responses then will be any different now, except that the environment for would be amateur landlords has become even more hostile.

In any event looking at your posts related to your steady employment ( or lack of), perhaps give it a couple more years for your own employment position to stabilise before contemplating taking on substantial debt for a venture you have no experience of.

Herzlos

RedfordML said:

We have a 750pcm mortgage, we have joint earnings of 90k. Our current home is valued at £325k and we have a 140k mortgage left to pay. 

That's about 4%? Which is (a) a pretty decent deal now, (b) not far off a rental/savings yield and (c) a lot better than you'll get with a higher LTV remortgage. 

I'm pretty risk adverse, so I'd be trying to pay off your existing mortgage faster to free up money later. 

poseidon1

Incidentally OP are there different people using your username and posting on these forums ( your spouse perhaps)?

I ask, on the basis that your declared income of £90k is somewhat contradicted by the post below concerning temporary supermarket shelf filling work:

https://forums.moneysavingexpert.com/discussion/6550109/jsa-question-have-a-job-offer-for-next-week#latest

Admittedly if this is the case ( other users sharing) you don't appear to be the only one doing this,  but it's confusing  and gives the impression of a split personality.

It's one of the reason I mentioned stability of employment in my post, which may not actually  apply to you at all, but the author of the post above.

penners324

Use excess cash to pay / invest into your pensions and / or pay down the mortgage debt.

Returns will be far higher and a lot less stressful 

penners324

Bigphil1474 said:

As above, ask your employer about AVC's - additional voluntary contributions. You need to weigh up the pro's and con's. If you are gonna drop dead the day after you retire, they won't be worth it. If you are gonna have a decent income anyway, they may not be worth it. Private pensions tend to be worse than work ones, as with work ones the employer also contributes. You might need specialist advice on pensions.

Avcs are only a thing in the public sector or the very rare db scheme in the private sector 

silvercar

With joint earnings of 90k, one or both of you may hit the higher rate tax bracket within the next few years. The way mortgage interest on BTL is accounted for in expensing the BTL works against you and you could well end up making a loss for this reason.

I would concentrate on getting a decent size pension.

Bigphil1474

Didn't realise, I am a long in the tooth public sector worker