Two houses, two mortgages

[LoanArranger]

Help please!
Does anyone know if it is law that one cannot have two properties, each with thier own domestic mortgage, or just the policy of most, if not all lenders?

[ali_alic]

We have 3 properties at the moment - one an ordinary mortgage and 2 on a buy to let mortgage (at a higher interest rate). However we are going for a fourth property which will be a holiday home, and that is not on a buy to let. If you are buying the second house prior to selling the first one (maybe you need to do up the 2nd house and will live in the 1st one whilst you are doing it), then there are special mortgages for that. But yes - you can only have one main residence property.

[LoanArranger]

Thanks for reply - it is the law issue that concerns - the new lender has not contitioned in offer or solicitor instructions that existing mortgage must be redeemed - so either they have made a mistake, or are not bothered - but what is the law?
To switch existing to 'second home' would be time consuming and of course re-introduce anxiety since the sale fell through - it will sell quite soon enough or would let but not high enough rent to cover loan so btl is out of question, but plenty of income to cover both loans and more so again, its just back to what the law says!

[buildersmate]

There's nothing illegal about having two domestic property mortgages - its more to do with whether the lender will let you have the money at the rate of interest. As the above says, Buy to Let mortgage rates are generally a little higher. What would be illegal is not advising one lender on your application of the existence of other loans. Mortgage providers are basically in the game of lending money at the best rate of interest they can extract - remembering that competitive pressure between lenders is intense and works in the borrowers favour. What the above posting may be commenting on is that one can only have one main residence for IR taxation purposes when it comes to Capital Gain on the value of the properties over time.

[buildersmate]

This response written before your response just above . JB