New joint mortgage while keeping flat/using equity as deposit?

[OrganicAlchemy]

Hi all,

I apologise if my questions seem ignorant but I'm new to home owning and finding conflicting info online.

Long question short - can I in theory buy a new property jointly with partner while keeping my solo owned flat/using some of the equity towards the deposit?

I purchased my flat by myself in Sep 21, mortgage renewal die Sep 24.

I am currently pregnant and will be die back at work after a year in Sep 24.

I figured that I will need to start thinking about up sizing to a house by age two probably latest as my flat is only small.

I presumed i had no option but to just sell it and buy with my partner but some colleagues have suggested that it may be possible for me to keep the flat and change it to a rental mortgage, while buying with my partner. That is fine but was thinking will take a while to save up an additional deposit for new property- then it was suggested it is sometimes possible to utilise some of the equity i currently have in my flat (approx 40k) towards a new one.

This is appealing to me as having the flat gives the security of my own property to fall back on as well as an investment for the future. Obviously there are costs to renting but as long as Im not making a loss on my mortgage payments thats okay.

Trying to research it myself and some posts suggest using equity as deposit is only open to over 55'?

So yeah sorry for long winded questions but my baby brain is making researching this quite difficult 😅

Thankyou!

Surely the equity is only available to use as a deposit for another property, if you sell the flat ?

So, If you bought the flat for £100 000 and believe it is now worth £125 000, if you don't sell the flat, you don't have the "cash" as it were, to put down as a deposit.
If you sell the flat, then the person who buys, hands over £125 000..... you have to give the £100,000 (less what you have paid off) to the lender, and you then use the £25 000 as the deposit. But if you don't sell it, you haven't got it.

You need to look for a “buy to let” mortgage quote to take out on your flat.

They generally need a higher deposit than normal mortgages.

You would take out the max buy to let mortgage you can afford and pay off your normal mortgage with it. Any money left over, you could then put down as a deposit on your new flat with your partner.

You’d need to pass affordability checks for both mortgages. I’m not sure how affordability checks work for buy to let (as hopefully you’d have a tenant paying rent to fund the mortgage most of the time) - sure someone else will be able to answer that or you can google!

Yes you can, remortgage the flat and take out some equity (not all) and this will depend on how much equity you have, the lenders evaluation of the flat and also the mortgage rate etc
If you get but to let mortgage on the flat after remortgage they expect higher LTV as it is higher risk but some banks may allow to keep your residential mortgage for six months or 1 year, it depends on the bank, obvs resi mortgage rates are better than BTL rates..
Then you can use the released part equity towards your new purchase
But be wary of tax implications when letting your flat, with interest rate increase and interest no longer tax exempt it is likely you will have to top up your BTL mortgage, then there is maintenance, estate agent management fee etc etc
Also if you buy a second home and keep your first home, you'll pay higher stamp duty so think carefully before doing this

I think this is only likely to work if you have a significant percentage of equity in your flat.

BTL mortgages usually ask for a high deposit. If you could still have 30/40% equity to put down AFTER taking out the equity you need for your house deposit, it could work.