2nd mortgage?

D

Debbie

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Hi
does anyone have any information on the following please. Have a house and want to rent it out(this is mortgaged). Want to buy and live somewhere else but keep the other house rented out.

Would the banks give you a whole new mortgage if the first house is rented out or would they only top you up a bit. Any info greatly appreciated. Thanks!
 
Debbie said:
Hi
does anyone have any information on the following please. Have a house and want to rent it out(this is mortgaged). Want to buy and live somewhere else but keep the other house rented out.

Would the banks give you a whole new mortgage if the first house is rented out or would they only top you up a bit. Any info greatly appreciated. Thanks!
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You'll have to convert the first mortgage into an investment mortgage, and then look for a separate mortgage for the new acquisition. They'll offer you less, because they will take the investment mortgage into account.

This is not a step to be undertaken lightly. You will need to check whether you may be liable for stamp duty clawback (if you bought as an FTB within the last five years). There's a lot involved in being a landlord: you have to find and vet tenants, register with the PRTB, maintain the house (which can involve the plumbing emergency at seven on a saturday evening, etc.) or pay someone else to do it, monitor the rent coming in, and do your tax returns.

Given how basic your first question is, are you sure you've thought this through? You should do a business plan to see how the number stack up, and how you'll fare if interest rates rise.
 
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