Second Property

Posted on 20 February 2019 by nick trask


I have a current mortgage outstanding and want to purchase a new property, is it difficult?

Hi Nick,

I think this is going to depend on what your intentions are for the new property. Are you going to be living there or are you just going to be letting out your other property and going to be living elsewhere? It will also depend on what other financial commitments you have, including whether or not you have a mortgage on where you are living at the moment.

You will need to declare your existing mortgage to any new lender and they will take it into account when calculating how much you can afford to borrow.  They will do this by either adding the combined debts together or by taking your existing mortgage payments as a monthly commitment. Either way it is going to result in a reduced amount for your new mortgage.

Depending on how much your existing monthly repayments are, will depend if you pass the affordability test.

It is also possible that they will want to see you have permission from your existing Lender to let the property, but this will depending what you are planning to do with the existing property.

Kath

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