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Ask an Expert Can I re-mortgage with a high loan to value?

Can I re-mortgage with a high loan to value?

Q: I have a 2 bed lower ground floor flat in SW7 (South Kensington). Value approx £700,000. Outstanding mortgage approx £540,000. Current interest rate 5.0%. I wanted to remortgage if there is any better rate. I would like to borrow £570,000. I have a clean

A:

If you need to borrow £570,000 on the rental property, it wouldn’t be possible because the amount is more than 80% of the property’s value. It’s possible to borrow £560,000 which is exactly 80% of the value, from a small handful of mortgage lenders. Most lenders will only consider a buy to let mortgage up to a maximum of 75% of the property value. In your case, that is only £525,000 which is less than you already owe your current lender. There is a variable rate deal at 4.20% to a maximum of 75% of the value, but there is a fee of 2.5% of the loan, so if the objective was only to save the cost of carrying the debt, then you’re probably better off keeping the debt at 5% and avoiding this large fee.

These questions are for information purposes only and do not contain all the details you need to choose a mortgage, ask one of our advisers for a personalised key facts illustration
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Some of this month's top interest rates are listed above; the actual rate will depend on your circumstances. Please note that this information does not contain all the details you need to choose a mortgage, ask one of our advisers for a personalised key facts illustration on 020 7519 4900. The rate displayed may become out of date at short notice.

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