Can you buy a second property (with a second mortgage) and keep and rent out the first?

[gemyellow123]

Hello,

We bought our first home not too long. We love our house but would have preferred a different area but with the housing crisis we're very grateful to have gotten anything as it was a struggle and long time saving.

We have a mortgage on our first home, but thinking ahead to the future. Can you have two mortgages at a time? Could we buy a second property with a second mortgage (aware we'd need a 10% deposit etc. again) but keep and rent out the first property, is this possible?

If we decided in the future to 'sell' our current property before paying off the mortgage, how does this work when buying a new property?

Thank you for your insights in advance

 

[Knuttell]

Indeed you can have multiple mortgages on multiple properties if the banks consider you a good risk.....the deposit is 30% iirc for investment mortgages not 10%.

 

[gemyellow123]

Indeed you can have multiple mortgages on multiple properties if the banks consider you a good risk.....the deposit is 30% iirc for investment mortgages not 10%.

Thanks for that. Does the 30% deposit still apply if the second mortgage isn’t for an investment property? It would be for a family home and the original mortgage used for our first home would be the one that we would rent out.

 

[Knuttell]

If its for a principal private residence PPR....(your main home) then it's 10%. The underwriters would look at your ability to manage both mortgages (stress testing your repayments with potential interest rate hikes/voids.).During the tiger years they almost insisted you hung onto your first PPR before they'd lend Haven't looked for an investment mortgage in a long time so don’t know what the criteria is for hanging onto the first property is

 

[Leo]

Some lenders are more favourable to this, and will allow ~50% or projected rent as income in the affordability calculations. There are a few previous threads on the topic here. A chat with a broker who will know how best to present your case would be a good idea.