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Deposits needed for mortgages?
matmad
Posts: 50 Forumite
Hi,
We want to let our current property, a 2 bedroom maisonette, and buy a 3 bedroom house nearby, hopefully sometime next year.
By then we will only have £10k left on the present mortgage for our flat which is worth approx £165k. I was thinking of going for a BTL mortgage on the flat for £90k, and a £170k mortgage for our new place, effectively giving us about £250k to spend on the new house.
The flat should pay for itself, and we can afford the payments on £170k mortgage for the house.
That's the basic idea, but I don't know enough about how it works. Can anyone tell me if we would need to put down a deposit on both mortgages?
Also, I don't work, would I be able to put the flat in my name rather than my husbands, so I can use my tax allowance against the rental income.
Our income is about £53k pa.
All advice gratefully received!
We want to let our current property, a 2 bedroom maisonette, and buy a 3 bedroom house nearby, hopefully sometime next year.
By then we will only have £10k left on the present mortgage for our flat which is worth approx £165k. I was thinking of going for a BTL mortgage on the flat for £90k, and a £170k mortgage for our new place, effectively giving us about £250k to spend on the new house.
The flat should pay for itself, and we can afford the payments on £170k mortgage for the house.
That's the basic idea, but I don't know enough about how it works. Can anyone tell me if we would need to put down a deposit on both mortgages?
Also, I don't work, would I be able to put the flat in my name rather than my husbands, so I can use my tax allowance against the rental income.
Our income is about £53k pa.
All advice gratefully received!
0
Comments
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Basic idea seems sensible, if you want to hold onto the flat.
On tax, the mortgage interest, upto the value of the property when you first started letting it, would be an allowable expense against the rental income. By the sound of it, there would therefore be no tax to pay on the rental income.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
You will need a minimum of 15% deposit on the buy to let property (based upon its value) and anywhere from 5% up on the residential property. The best deals are for 25% or more deposit at the moment."The true measure of a man is how he treats someone who can do him no good."(Samuel Johnson 1709-1784)
Lots of years in financial services, still learning!0
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