Can I use the equity on my home as a deposit for an investment property?

In short, yes. If you have sufficient equity in your residential home, it is possible to release enough for a deposit on an investment property.

The easiest time to release equity from your home is when you’re remortgaging, and many property investors do this to fund their next investments. If your home isn’t due a remortgage for a few years and you still have Early Repayment Charges (ERCs) in place which will make it expensive to remortgage early, you could consider taking out a further advance. A further advance is where you take on additional borrowing from your existing lender, usually at a different rate to your current mortgage, and use this as your deposit. Then, when you come to remortgage your home, you can release equity to pay off the further advance.

For many, this is a much quicker way to raise a deposit for an investment property, compared to saving up enough cash month on month. Buy to let property purchases require at least a 15-25% deposit; the more deposit you have, the better the mortgage rates you’ll have access to.

If you would like more information on how to use equity from your home as a deposit, speak to one of our experienced brokers who will able to assess what the best option for your circumstances is going to be.

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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