Our house is valued at £250,000. There may be a fee for mortgage advice. Say that you've lived in your house for a few years and are now looking to release some of the equity you've built up. However, there are some important factors to keep in mind when using a HELOC or a second mortgage to fund your second home. What Kind of Airbnb Occupancy Rate Can You Expect? How Can I Find Real Estate Property for Sale Near Me? You may have to pay Land Transaction Tax (LTT) for properties bought in Wales. You can release equity from your house to put down a deposit on another property, but you will usually need significant equity to do this. Lump sum equity release can be a useful strategy, but only if your investment plans justify the amount that you’ll ultimately be dishing out on interest repayments. This means you have to be aware that the second you take that money out, you’re increasing your mortgage and paying interest of around 7% on that lump sum. Equity If you own a buy to let mortgage, using the equity to buy out another party from that mortgage, or perhaps even from another property, is certainly a viable option. If the property increases in value (appreciates), its equity will also increase. By using our mortgage calculators, we can help you understand key things like how much you can borrow. To buy a new car or travel. Use our simple stamp duty calculator so that you can factor this into your budget. Home equity is the difference between the market value of your property and the amount still owing on your home loan. Another way to access your equity if you don’t want to sell your house is to remortgage by borrowing against it. In the meantime, you might want to read our article ‘How to remortgage if you’re self-employed’. They'll take into consideration your whole situation, including your current income, outgoings, and clearly go through all your options so you can make an informed decision that’s right for you. Interest rates on primary residences are usually lower than on investment homes, because lenders work on the premise that you are less likely to default on loans tied to your primary home. We can help you calculate your monthly mortgage repayments. If you wanted to release this equity to buy another property, you could potentially borrow up to £475,000, which would provide you with £275,000 for the purchase and take your LTV to 95%. Registered Office: Capital House, Pride Place, Derby. We believe that everyone should be able to own their home. Equity release might seem like a good option if you want some extra money and don’t want to move house. Our promise to you is to make sure you never pay more than you need to. The higher the percentage of a mortgage on an investment property, the higher the leverage that you will have on it. As the equity increases, you can remortgage and release some of the equity to put it towards other things, such as home improvements or, in this case, buying another property. You could then build a buy-to-let empire or finally purchase that holiday home you have always dreamed of. This equity is often accessible to you via the process of increasing your mortgage, and many people use this money to invest in another property. Use analytics to ï¬nd lucrative traditional or Airbnb properties in a matter of minutes. contractor, freelancer etc. Although you might not have the money saved up to put down a deposit on a second home right now, there are other ways you can still achieve this. If you want to let the property, you will need to a buy-to-let mortgage. Open 6 days a week - until 7pm on weeknights. How equity release can help divide assets One of the most emotive decisions to make is who, if anyone, will keep the marital home.