Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • RockcliffRugby
    • By RockcliffRugby 13th Jan 18, 10:40 AM
    • 4Posts
    • 0Thanks
    RockcliffRugby
    Remortgage now but plan to rent out and move to a bigger place in the future
    • #1
    • 13th Jan 18, 10:40 AM
    Remortgage now but plan to rent out and move to a bigger place in the future 13th Jan 18 at 10:40 AM
    35 y/o M & F with two young children coming to end of the fixed term on our mortgage and would like to move to a bigger place in the next 3-5 years. Our current mortgage is fixed at 1.75% but will increase to 4.74% at the end of the term and our LTV is approx. 68%.

    Our current house is in a really good location and next to a fantastic school, which makes it an ideal property to rent out.

    My dream scenario is that we can move to a bigger house but keep our current property to rent out, eventually using the rent pay off its own mortgage, put the kids through university, be a source of income when we retire and also (to sound morbid) pass on to the kids when we are gone.

    The vast majority of our savings are tied up in our current house so we won't have a big deposit unless we release equity.

    As the fixed term on our mortgage is up for renewal in the next 3 months I want to make some good decisions around it, taking my dream scenario into account.

    Have any of you guys got any experience doing this or provide me with some top tips?

    Thanks
Page 1
    • kingstreet
    • By kingstreet 13th Jan 18, 10:57 AM
    • 33,545 Posts
    • 18,183 Thanks
    kingstreet
    • #2
    • 13th Jan 18, 10:57 AM
    • #2
    • 13th Jan 18, 10:57 AM
    When do you plan to do this?

    This will determine if you take a customer retention product from your current lender and start your plans when that ends.

    When you do get around to it, you'll be remortgaging the current property as a let to buy, subject to equity/valuation and the rental income potential. Assume you'll have to leave 25% of the value behind and the minimum rent will need to be 140% of the monthly mortgage interest assuming a rate of 5.5% pa.

    The residential should be based on normal affordability with no 'cost' from the let, providing it's viewed as self-financing as set out above.

    Watch out for the Government reducing what you can claim against tax and you having to pay more.

    Watch out for the second property SDLT surcharge which you'll pay on your new purchase.

    Finally, read up on landlord responsibilities and Capital Gains Tax in future.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • RockcliffRugby
    • By RockcliffRugby 13th Jan 18, 11:21 AM
    • 4 Posts
    • 0 Thanks
    RockcliffRugby
    • #3
    • 13th Jan 18, 11:21 AM
    • #3
    • 13th Jan 18, 11:21 AM
    When do you plan to do this?
    Originally posted by kingstreet
    In the next 3-5 years, basically at the end of our next fixed term.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,873Posts Today

9,034Users online

Martin's Twitter
  • We all knew we'd win in the end. Never in doubt! ....walks away whistling

  • Yeeesss. Phew. Wow. Uh. Oy yoy yoy

  • It's interesting that 80% of the crowd are young women... According to the close ups we keep seeing anyway.

  • Follow Martin