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Second mortgage

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  • Second mortgage


    I bought my first flat in London 4 months ago. Flat price was £380,000. Got a mortgage for 80% with a fix rate for 2 years.
    I’m considering now to buy a new flat at more or less the same price. I have 15% - 20% for deposit (out of £400,000).
    My questions are:
    1. If I’ll rent the first flat, I assume I can get a rent around £1500 which is the monthly repayment. Will the bank accept it? I know they are usually looking for 130%. How will they look at this situation that I bought it for living but suddenly considering to rent it (I didn’t plan it in advance)?
    2. How will potential lender will evaluate my situation? (existing one mortgage and asking for another one for another property)?


  • #2
    Re: Second mortgage

    Hi M,

    1. You will need to get permission from your bank to move it onto a buy to let mortgage - if they refuse then go for a 80% ltv buy to let remortgage.

    2. When approaching lender's for another mortgage you can tell them that you intend to let out your current property - so long as the rent covers your current mortgage plus 25% then they will be fine.


    • #3
      Re: Second mortgage

      So lest see, you have borrowed £304,000 and you are thinking or borrowing another £320,000 total debt £624,000. Thats over half a million pounds!

      Whether or not you actually manage to gte the rent you NEED whichever you rent out and even IF interest rates remain low (no gurantee whatever Carney says!) it is still reckless.

      I would hope that most lenders would have the common sense and refuse to even consider what you want to do, to protect themselves and you, from yourself!
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