Hi

I have 30k left on my fixed mortage to pay on my house thats worth 130k. I would like to rent this house to the local council. I would also like to purchase a new property for with a value of £200k so that I can live in it whats the best way financially to go about doing this i.e. remortgaging my house etc...

Hi GMan,

If you don't need to draw any extra funds from that property, you will need to ask you current lender for permission to let. Normally if your account is ok, it will not be a problem; you will just need to pay an admin fee of around £150. Then you will be able to have a new mortgage on another property as the current one will be disregarded by most lenders as it will be rented. However, if you need to remortgage this house to enable you to buy a new one, then it is quite different. Firstly, if you are on a fixed rate, there may be an early repayment charge if you are to remortgage it early; sometimes if you stay with your current provider, penalty can be reduced, but not many lenders offer it, so don't count on it, ask. It is possible, that your lender may not have an appropriate product or their criteria don’t allow council tenants. If you are to remortgage, then you will need to have buy to let mortgage, which currently probably will be up to 70% LTV. I think in your circumstances it makes sense to speak to a mortgage advisor.