Equity Release Loan on Your Buy-to-Let Mortgage?

They generally only apply to your main residence, but if you’re a landlord and you want to free up some money in retirement age then you may be able to get a loan against a property with a buy-to-let mortgage.

Can You Release Equity From Your Buy-to-Let?

You can release equity on a home with a buy-to-let mortgage, but lenders have tighter restrictions - you'll be expected to use the money to contribute to investments and you'll need formal financial advise that has explored other options.

Continue reading to get the full details.

Looking for other information on Equity Release? This guide has info on 'Can you release equity on a buy to let mortgage?' We have also writen extensively about:

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• - The main Equity release advantages and disadvantages

We update all our guides regularly. If you are researching Equity Release and we haven't got an exact guide that helps you, keep coming back as we update daily.

The Positives of Equity Release on Buy-to-Let Mortgages

If you do release the equity on your buy-to-let mortgage, you will get a cash lump sum available to you without losing out on the regular rental income you’re used to.

If you need the rent money to pay for your normal budget, but you’re looking for capital to help you with retirement plans, then it could be the solution you need. Your tenant won’t be affected either – the home will be yours to rent out for the duration of your life or until you become unable to continue as a landlord due to moving into care.

The Negatives of Equity Release on Buy-to-Let Mortgages

Equity release on a buy-to-let mortgage will have a serious impact on the value of your portfolio, and with interest building up on one or more properties you could end up owing an incredible amount compared to what you originally borrowed – you could lose the entire value of your portfolio when you do pass away.

You’ll also be faced with more restrictions from the lender than you would for a normal equity release loan. If you need the money to continue investing in more property then you’re more likely to be accepted, but try to release equity on a rental property just because you want that once-in-a-lifetime luxury cruise and the lender is more likely to reject you and tell you to look at other ways of raising the funds including equity release on your own home.

Alternatives to Equity Release

With all that in mind, there are three main alternatives to equity release if you need to free up capital. You could take out a secured loan on top of your mortgage, or you could re-mortgage your portfolio.

Either of these options could see you increase your monthly repayments, but you’ll have fewer restrictions and less impact on your estate when you do pass away. Alternatively, think about selling the property. It’ll likely be easier on your workload and you’ll get the benefit of the cash upfront, at the cost of the regular income.

Equity release on buy-to-let mortgages can be a bit of a minefield but the options are definitely there if it’s something you think is right for you. Read more on equity release through our website, we have guides and commentary on all aspects of Equity Release.

How Can Money Savings Advice Help You With Releasing Equity?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already helped thousands of people get the best Equity Release deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.