Using Equity as a mortgage downpayment.

Bigeye74 | 13:47 Sat 24th Mar 2007 | Personal Finance

6 Answers

Can someone explain how I'd use the increase in value of my property (still got 20yrs to pay off but it's rented out) as a downpayment for another. What do I need to take into consideration and what do I need to pay back. (UK)

Lloyds TSB 'Save The Change' Savings

how much tax credit ?

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johnny37

You would need to remortgage to release the equity,

Bigeye74

Question Author

I take it that means my mortgage payment will saor? Is there a way to take a loan against the equity like the equity release schemes on TV or do I actually have to have paid my mortgage off?

Ethel

You usually have to be at least 60 and have no mortgage for those schemes. They have to wait until you die before they get their capital back - so the younger you are the less they release and the more interest you pay.

Bigeye74

Question Author

So my only way to get a deposite is to remortgage or sell?

Ethel

Yes, although you could use the property as a security for a 100% mortgage.

A charge would be put on it, giving the lender rights if you don't keep up the payments.

Bigeye74

Question Author

Ethel, what would the difference be between securing the mortgage and not securing it against my house. Am I unlikely to get a BTL mortgage without putting my house against it?

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