I calculate roughly that the 2000 a month we earn on our rented house would leave a profit of about 300 a month after tax
Does your existing lender have a tracker mover offering?
I suspect you would be better off cashing out the equity in your existing home and using that as part of the consideration for your new home - but you would really need to crunch the figures to be sure.
The template set out in this thread may help -
https://www.askaboutmoney.com/threads/keep-apartment-as-rental-or-move-tracker.203907/
Also, bear in mind that you will get a lower mortgage rate with a lower LTV.
are you sure you can keep the tracker if you rent out the property, be careful if you are going to same bank for mortgage. you could send up on BTL rate.
If it's a house in a good rental location, if a rent of 2,500 is achievable it's more likely to be worth 400k than 300k in the current market. You really need to get it valued as a starting point to such a big decision. Any estate agent will give you a free valuation for the purposes of sale. Similar with rent - I'd get an independent valuation if there's nothing comparable.
Incidentally, I agree with RedOnion that your figures seem off - I suspect you are either underestimating the value of your home or overestimating the likely rental income.
PTSB actually has a pretty good tracker mover offering -
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