Raising a Deposit

Posted on 13 March 2011 by Jquayam@hotmail.com

I bought an investment property for £293k, currently valued at appx £400k, the mortgage left is £251k. I want to now buy a property for residential purpose, but I have no deposit. Is there anyway I can get help to purchase a property worth min £160k. A broker told me I should get secured loan to raise the deposit, is that viable, or can my current lender help with out changing the product on my current property?


Your current Lender may well be able to help you raise the deposit and usually they can do this without affecting the terms of your existing mortgage. The amount that you will be able to raise will depend on your monthly rental income and the property's value. I would explore this avenue before considering alternative methods of raising the deposit.

If your Lender wants to change your existing mortgage deal and this is on favourable terms then a secured loan may be a viable option. This will allow you to keep the existing deal and raise the deposit separately. Once you know the interest rate on the secured loan you can do the maths to work out if this is more advantageous than losing your current deal and taking the whole amount, existing mortgage plus capital raising on a new mortgage, deal. Your broker will be able to advise you on this.

However you raise the deposit I believe that we can help you with the mortgage on your new residence. Please call 0344 346 3672 and tell the consultant the date and title of your question. They will be able to look at your situation and advise you accordingly.


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.

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