Increasing borrowing against property after letting?

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    Increasing borrowing against property after letting?

    May I trouble you with a quick question on debt planning?

    I learnt that a person letting a property may borrow up to the value of the property (when it is first let) and offset any interest against the income.

    - If somebody is only partly mortaged, can additional borrowing be taken up to this value of the property no matter what borrowing will be used for?

    - Does additional borrowing have to be taken before it is first let? And if so what happens if letting ceases, additional borrowing is taken, and it is let again say a year later?


    Not quite! Since the credit crunch the banks have started lending again but they tend to require a 25% deposit. Thus if you managed to remortgage, you could only do so up to 75% if the current value of your BTL property. Some clever mortgage broker may be able to do better than this, so it is these people you should be approaching.
    You shaould be able to do this at any time to obtain additional funds if the value and the above restrictions hold up. The money borrowed can be used for anything. My next door neighbours (before the credit crunch) transferred their mortgage on one of their BTLs to enable them to take their family on holiday. Now they are in negative equity but the rent still pays the mortgage with an excess to pay for repairs, insurance and voids.

    Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.


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