Posted on 10 February 2014 by Sarah
We have a property worth approx £300,000. We currently have a mortgage of £75,000 which is on a very low tracker rate(fixed for the duration of the term). We would like to purchase a second property for approx £130,000 to rent out. So as not to lose the benefit of our low interest mortgage, could we take out a second mortgage, (interest only) on our existing property to fund the purchase.
There a number of ways to approah your enquiry. You most certainly could take a 'second charge' loan out on your current property, however as second charge rates are far more expensive than residential rates, your aggregate loan of £205,000 could be more expensive than you like. If your existing lender would agree to a further advance, then we can look at an alternative.
The most obvious one would be to lower the second charge loan and take a Buy To Let mortgage out for the remainder. That would give you £75,000 on your low tracker, £32,500 on the second charge, and the remaining £97,500 on a Buy To Let mortgage.
If you would like to discuss this in more detail then please contact one of our mortgage experts on 0844 3463 706.
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