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Is it possible to rent existing home and then buy another

(7 Posts)
dizzydo Tue 03-May-05 18:57:58

Does anyone know whether it is possible to turn our mortgage on our existing home into a "buy to let" mortgage and then release the equity in that property to buy somewhere else (or use the equity as security for a new v.large mortgage on a second home).

I know we will of course have to see an FA but we are just at the "talking it over stage" and I wondered if anyone had done anything like this and what their experiences.

I would greatly appreciate any Mumsnet knowledge. Thanks.

Twiglett Tue 03-May-05 19:01:09

yes of course it is, but don't forget buy to let tends to be at a higher rate

dizzydo Tue 03-May-05 19:02:57

Any idea of any particular firms who specialises in this particular thing Twiglett?

beachyhead Tue 03-May-05 19:14:39

Most mortgage lenders will have a buy to let product. They may need more equity, so you may not be able to release as much as you would like, and the rate will be higher. You should also think about Capital Gains Tax on any further increase in the value of your house.

oops Tue 03-May-05 19:15:56

Message withdrawn

dizzydo Tue 03-May-05 19:17:26

That's a good point Beachhead hadn't thought of capital gains. Presumably we would pay that on whichever one we sold first? Am I right in thinking that and if so presumably one tries to sell the one with the least equity?? (unless it all goes horribly wrong we would be looking to keep both properties for about five years)

Freckle Tue 03-May-05 19:19:40

You also need to check out the letting market in the area you wish to let. Many speculators have been caught out by buying to let only to find that the letting market had been flooded and the rent they were able to charge didn't cover the mortgage repayments.

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