remortgaging btl to pay off residential mortgage

[star171]

Hello,

I have a BTL property worth around 90K with a mortgage of 50k on interest only, it is up for remortgage in march, the mortgage is £236pm, rent is £330pm. I was wondering if it is possible if I could take 20k out of this house and pay 5k towards renovation and 15k towards my residential mortgage which is now 54k on a repayment mortgage. Firstly is this possible and secondly are there any tax issues that I need to be aware of when doing my self assessment?

Thanks

[Tax Accountant]

Hello,

I have a BTL property worth around 90K with a mortgage of 50k on interest only, it is up for remortgage in march, the mortgage is £236pm, rent is £330pm. I was wondering if it is possible if I could take 20k out of this house and pay 5k towards renovation and 15k towards my residential mortgage which is now 54k on a repayment mortgage. Firstly is this possible and secondly are there any tax issues that I need to be aware of when doing my self assessment?

Thanks

Make sure that there are no penalties on early repayment of your residential mortgage.

BTL mortgages normally are more expensive than residential mortgages.

On the other hand, you MAY be able to get tax relief on the BTL loan interest, so long as the amount of remortgage advance being used for personal purposes is not more than the difference between BTL original cost and BTL mortgage outstanding.

Ramnik