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smatt

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  1. Thanks Stuart, That is really helpful and I had actually not factored in the tax I'd need to pay on any income so thanks for spotting that Matt
  2. Hey all, I'm hoping someone can help me understand a bit more about equity release for the purpose getting a deposit for another home. I have a flat in London that I bought in 2010 on a 35 year mortgage. I have managed to get the remaining mortgage down to around 10 years and in that time the flat has also gone up in value. I want to try and keep the flat on if I can, so want to understand how much equity I could potentially release and under what circumstances that capital could be used by way of a deposit on a new place. For simplicity, say I bought the flat for £200,000 with a deposit of £30,000, requiring a mortgage of £170,000. I believe that results in an LTV of 82.4%. Now lets say that today the flat is worth £300,000 and I have paid off the mortgage so only £100,000 is remaining. That I believe gives me a new LTV of 33.3%. I've read that for a buy-to-let property, you generally need an LVT of below 70%. Using the example above of a £300,000 property with £100,000 left to repay, I could potentially take out £90,000, resulting in a new LTV of 70%. Is that correct? If so and assuming I was able to re-mortgage the flat on a buy-to-let agreement, how would another mortgage lender then factor that arrangement in when assessing my situation? Would they just see me as a guy with a £90,000 deposit, in which case I could borrow whatever I could borrow with them, or would the fact I had an existing property and mortgage affect any new affordability calculations? Hopefully that makes sense, I just want to know what my options are in terms of keeping the current flat or not. Thanks in advance! Matt
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