How much equity would you need to keep a house for rental?

C

CD2005

Registered User
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Hi,
We've built up around 200k in equity on our current house and would like to move but use part of this equity for stamp duty and deposit and rent out the old house while we live in the new house.
My question is, do we need to have a certain amount of equity left in the house for them to allow us to own 2 or do we need to be able to cover the full amount of the 2 mortgages?

Thanks
 
There's no simple answer to this one. Each lender has it's own criteria for assessing mortgage applications. But for the scenario you describe, a lender is going to look at your earned income, all commitments (both mortgages, other loans etc.) and the anticipated rent from your current home before deciding if it's a viable deal.

Affordability is going to be more relevant that the amount of equity you have.

Liam D. Ferguson
www.ferga.com
 
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