UK Landlord Forum / Life

Good Morning!

I'd like some advise on remortgaging and releasing equity in several BTL properties I own.

To let you know some background, I have 2 BTL properties on an expat mortgage (as I currently live outside the Uk).

Property 1- bought for £87k, I put down a 30k deposit, and have a £57k mortgage, the 2 year fix rate comes to an end in 2 months.

Property 2- bought for £75k, with a £35k deposit, and a mortgage of £40k. The 2 year fixed rate finishes in 4 months.

Both these are rented out at a yield of 8%. So in total I earn around £500 profit per month.

I am relocating back to the UK in December, I'd like to release as much equity as possible to use on deposits for several more mortgages for cheaper properties to renovate these to sell on or rent out. 

As I live abroad, there are not many re-mortgage options available to me, for example no interest only mortgages, therefore I will have to apply for these once I am residing back in the UK.

When the 2 year fixed rate on my current mortgage expires, I'll automatically be put on the standard rate agreed with the mortgage company. Can I still re-mortgage, in say 6 months without any charges to release some equity?

Basically I'd like to built my property portfolio using the equity tied up in my current properties.

Any help, advice or ideas would be much appreciated! I'd be happy to provide details of needed.

Much appreciated!

Usually once the incentive period ends and you are on the SVR then you can remortgage with little fee (these days there seems to be an admin fee)
Obviously though you need to confurm per terms of your mortgage.

Also you'd be better off calling a mortgage broker like London and Country to find your best option than posting here

Best of luck

Quote from: Burnsdesign on May 08, 2016, 12:25:56 PMProperty 1- bought for £87k, I put down a 30k deposit, and have a £57k mortgage, the 2 year fix rate comes to an end in 2 months.

Property 2- bought for £75k, with a £35k deposit, and a mortgage of £40k. The 2 year fixed rate finishes in 4 months.

Shame these weren't repayments... less owed, less interest, less tax.

Interest only mortgages is not where it's at in the future... it's becoming the realm of the more desperate BTL Landlord. Just my view! Have you taken into account how the new tax rules may affect you? If so, are you OK with getting further interest only mortgages? You say that you want to release the equity - but you haven't said what the equity might even be - do you know? Obviously you've not created any equity yourself by paying down the debt, you've just serviced the interest... so your only equity is going to come from capital appreciation, am I correct? But if you've only held them for less than 2 years - is that going to be massive amounts? Maybe 10%? Depends on where you are, of course, but with those prices quoted it's not central London, right? 

I'd be careful... that's what I'd be... very careful. If you've put down pretty large deposits on property before, maybe you're a good earner and you can go about this by working hard and saving for another deposit rather than going the more notional route?

£500 per month is not a lot. If you doubled-up on your properties then you might be on £1,000 per month... still not a lot. Then - oops - you get a boiler breakdown and 2 months of profit are gone out of the window. It all feels like sailing too close to the wind to me. I'm a pessimist though. I accept that I am.

Quote from: Hippogriff on May 08, 2016, 09:58:09 PM

Quote from: Burnsdesign on May 08, 2016, 12:25:56 PMProperty 1- bought for £87k, I put down a 30k deposit, and have a £57k mortgage, the 2 year fix rate comes to an end in 2 months.

Property 2- bought for £75k, with a £35k deposit, and a mortgage of £40k. The 2 year fixed rate finishes in 4 months.

Shame these weren't repayments... less owed, less interest, less tax.

Interest only mortgages is not where it's at in the future... it's becoming the realm of the more desperate BTL Landlord. Just my view! Have you taken into account how the new tax rules may affect you? If so, are you OK with getting further interest only mortgages? You say that you want to release the equity - but you haven't said what the equity might even be - do you know? Obviously you've not created any equity yourself by paying down the debt, you've just serviced the interest... so your only equity is going to come from capital appreciation, am I correct? But if you've only held them for less than 2 years - is that going to be massive amounts? Maybe 10%? Depends on where you are, of course, but with those prices quoted it's not central London, right? 

I'd be careful... that's what I'd be... very careful. If you've put down pretty large deposits on property before, maybe you're a good earner and you can go about this by working hard and saving for another deposit rather than going the more notional route?

£500 per month is not a lot. If you doubled-up on your properties then you might be on £1,000 per month... still not a lot. Then - oops - you get a boiler breakdown and 2 months of profit are gone out of the window. It all feels like sailing too close to the wind to me. I'm a pessimist though. I accept that I am.

Can I ask your opinion on why you think that interest only is not the way forward in future? I'm interested to hear if you've modeled the figures of the tax implications versus the compound interest you could earn over time on the capital that you don't use to pay off the house.

Cheers.