Posted on 14 January 2013 by Scott
I have a house which is valued at approximately £115,000 and an outstanding mortgage of £40,000. I am wanting to release around £20-30k equity from my current house and use this as a deposit to buy another house valued at £150k. We are hoping to live in the new house and rent out our current house. Is this possible as my bank have said that they won't allow me to release the equity if I am to use it as a deposit on another house? Also could I port my current mortgage across to the new house as the rate I have is +0.99% of base rate.
There really shouldn't be any reason why you can't release the equity you want to from your existing property, turn it into a Buy To Let, and move to a new main residence. Unfortunately there are lenders out there, who because of the exceptionally low rates that many borrowers are on, are looking to use lending policy as a lever to force such borrowers away from them.
Subject to meeting rental criteria it should be relatively straightforward to raise a Buy To Let mortgage for £70,000 (61%LTV) and you would then need to check with your current lender whether you can port your exitsing rate to the new property. If they won't allow it, then we look at the whole of the market to find the most suite alternative.
If you'd like to discuss your enquiry in more detail, then please let me know and I'll arrange for one of our consultants to contact you.
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