We own two properties, one outright & is rented, the other we live in with a mortgage. Can we release equity in the rental for major home improvements?

Posted on 8 July 2015 by Gemma

We have two properties, one we own outright and has tenants and the other where we live which is mortgaged. We would like to release some equity in the rental for some major home improvements. Any advice on how to do this?


On the face of it this should be fairly straightforward to do. You don't mention which property you are looking to do the works on, but if I assume it's your main residence, then you can look to raise a mortgage on the rental property. Typically most lenders who do Buy To Let, will go up to 75% loan to value (LTV), and will base the loan on a combination of your personal financial situation and the rental income being received.

Lenders tend to base the rental calculation on the rent covering 125% of the monthly mortgage payment, based on a notional rate of 5 - 5.5%. i.e. if the loan was £150,000 then the rent would need to be £781.25pcm.

The next move would be to speak to one of our consultants on 0344 346 3672 and they'll be able to give you a more detailed idea of how we can help you get the money for the home improvements.



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