Can we raise the purchase price of a renovation project against our main residence?

Posted on 11 April 2013 by Kevin


We own our property outright and it's approx. value is £220,000. We are considering buying a 2nd property as an investment to do up and sell on, rather than as a buy-to-let. The approx. value of the 2nd property will be £120,000 and we wondered if it would be possible to borrow the full amount against our main property using an interest-only mortgage as I understand that many lenders are no longer offering interest-only deals.? Our joint annual income is in the region of £58K. Thanks.

Kevin,

Whilst it's true that many lenders aren't offering interest only, many still are. Quite a few lenders cap their interest only offerings at 50% LTV and also require a minimum equity level of £150,000. In theory there's no reason why you can't raise the full purchase price on your existing property, subject to meeting the usual standard lender criteria.

However, there are still lenders who will look at the levels of borrowing on interest only that you are seeking. These will tend to be the smaller lenders who look at each case individually rather the major high street ones.

If you'd like to discuss your enquiry in more detail, then please let me know, and I'll arrange a convenient time for one of our consultants to contact you.

Regards,

Simon

simon.collins@johncharcol.co.uk

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