Call us on 0344 346 3672
or arrange a callback

We own two properties, one outright & is rented, the other we live in with a mortgage. Can we release equity in the rental for major home improvements?

Posted on 8 July 2015 by Gemma


We have two properties, one we own outright and has tenants and the other where we live which is mortgaged. We would like to release some equity in the rental for some major home improvements. Any advice on how to do this?

Gemma,

On the face of it this should be fairly straightforward to do. You don't mention which property you are looking to do the works on, but if I assume it's your main residence, then you can look to raise a mortgage on the rental property. Typically most lenders who do Buy To Let, will go up to 75% loan to value (LTV), and will base the loan on a combination of your personal financial situation and the rental income being received.

Lenders tend to base the rental calculation on the rent covering 125% of the monthly mortgage payment, based on a notiional rate of 5 - 5.5%. i.e. if the loan was £150,000 then the rent would need to be £781.25pcm.

The next move would be to speak to one of our consultants on 0344 346 3672 and they'll be able to give you a more detailed idea of how we can help you get the money for the home improvements.

Regards,

Simon

More than mortgages, talk to me about:
Financial Protection | Investments | Personal and Corporate Pensions | Home Insurance
General Insurance | Valuations | Conveyancing | Wills | Home finders

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


Legal

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.

John Charcol is a trading name of John Charcol Limited and its Appointed Representatives. John Charcol Limited is authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 665649. Registered in England No. 9157892. Registered office address for John Charcol Limited is 5th Floor, Cutlers Exchange, 123 Houndsditch, London, EC3A 7BU. The FCA does not regulate some investment mortgage contracts. Calls may be recorded for training and monitoring.