Remortgaging to BTL to release equity and move house

[Ilikebeaver]

Currently our mortgage is £200k and has between £60-£90k equity.

Ideally, I would like to keep our current house and convert to blt and release equity to move to a larger house, but I don't think we have enough equity to do so looking at the online calculators.

We can convert to BTL but it looks like they want the LTV at 80% or under meaning if the house valuation came back at say £275, the maximum amount of equity to release would be £20k, and that would not be enough for us to put down as a deposit on say a £300K house.

Also, the BTL companies want rent to cover 120% of mortgage payment, meaning it would have to be interest only as I am only guessing, but I think rental would be £950pm max...

Has anyone done anything similar and it worked?

[Sarnie]

Ilikebeaver said:

Currently our mortgage is £200k and has between £60-£90k equity.

Ideally, I would like to keep our current house and convert to blt and release equity to move to a larger house, but I don't think we have enough equity to do so looking at the online calculators.

We can convert to BTL but it looks like they want the LTV at 80% or under meaning if the house valuation came back at say £275, the maximum amount of equity to release would be £20k, and that would not be enough for us to put down as a deposit on say a £300K house.

Also, the BTL companies want rent to cover 120% of mortgage payment, meaning it would have to be interest only as I am only guessing, but I think rental would be £950pm max...

Has anyone done anything similar and it worked?

You will also struggle to get an 80% BTL if your are a First Time Landlord........

Even if you could, the number just don't fit;

£290k value x 80% = £232,000

£232,000 x 5% (stress rate used by most lenders) = £11,600 annual interest

£11,600 /12 = £966 per month

£966 x 125% = £1,208 per month rental required per month as a minimum.............