Releasing money from rental property

[needafewbob]

I have a rental property that is mortgage free and let to a family long term at good rent, and tenancy has run smoothly for several years. Value circa 300k.

My family and I live in our family home that has a mortgage circa 300k.

We need to put our hands on some cash at present for several reasons that are all happening at the same time (both cars need replacing, our own house needs considerable upgrades - windows - roof repair. We also need to fund 4 children in university).

Can we release 100k from the rental property by way of a morgage?

We don't want to sell the rental property, as going smoothly for some time, and don't need it's entire value. We don't want to re-mortgage our own family home (reason for this is complicated, but includes the fact that it's a tracker.....so don't want to disturb that........other part of the reason includes ill-health which could be barrier to getting a big mortgage).

Big question is:

Can we release 100k from the rental property?

 

[Brendan Burgess]

The main lenders are unlikely to give you such a loan.
However, the likes of Pepper Finance or Finance Ireland might.
Best to go to a broker.

However, first you should go to the lender on your home. They should give you the loan without it affecting your tracker.

If they don't, you should seriously consider selling the investment property and being debt free. A loan secured on the investment property is going to be expensive.

And contrary to what some people think, you will not be getting any tax relief on the interest. Although it might be secured on the buy to let, the purpose was not for the purchase of the buy to let, so the interest can't be set off against the rent for tax purposes.

Brendan

 

[Marantz]

You would think that your bank, at the very least, would see the opportunity to cross secure the home tracker property with a buy to let property mortgage with good equity in case of default on the tracker?
Assuming you meet the affordability criteria .

 

[Gordon Gekko]

The debt will be pretty expensive and not deductible as has been pointed out.

I would also question the wisdom of using long term mortgage debt to fund a depreciating asset like a car.

Having said that, if the plan is to use the loan to bridge a short term gap and to pay it back over the next 5 to 10 years, with a view to managing cashflow, I would seek out Dilosk’s “interest only option”. Yes it’s 5.5% odd and not deductible, but it’s still better than a personal loan. PCP can be 0% but new cars are to be avoided in my view unless you have cash to burn.

 

[AlbacoreA]

....

If they don't, you should seriously consider selling the investment property and being debt free. A loan secured on the investment property is going to be expensive.

....

The main lenders are unlikely to give you such a loan.
However, the likes of Pepper Finance or Finance Ireland might.
Best to go to a broker.

However, first you should go to the lender on your home. They should give you the loan without it affecting your tracker.

If they don't, you should seriously consider selling the investment property and being debt free. A loan secured on the investment property is going to be expensive.

And contrary to what some people think, you will not be getting any tax relief on the interest. Although it might be secured on the buy to let, the purpose was not for the purchase of the buy to let, so the interest can't be set off against the rent for tax purposes.

Brendan

I've heard this a few times on aam sell off an investment property and become debt free. But what if the value of the cashflow of the income. Assuming it's positive after all bills are paid.