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Mr Jain is a software consultant who wrote into The Times to ask for advice. He owned a £325,000 house in St Neots, Cambridgeshire, with his wife. He earns £75,000 a year in his full-time job and the couple earn £25,000 a year from two buy-to-let properties they own. He wanted to know if he could release equity from his property to raise the funds for a new home while turning it into a buy-to-let (this is known as a let-to-buy mortgage).

Aaron Strutt, product and communications director, Trinity Financial, told The Times:

“Let-to-buy mortgages are popular because they allow borrowers to switch their homes to a buy-to-let loan while releasing equity to put towards the purchase of a new property.

“Some of the biggest buy-to-let lenders are happy with these mortgages, including Barclays, Clydesdale Bank, Virgin Money and BM Solutions. The issue for borrowers is the buy-to-let stress tests and the tough rental calculations used to work out the maximum loan size.

“As Mr Jain’s main residence is at 71 per cent LTV there is not a large amount of equity to release, because let-to-buy mortgages are capped at roughly 75 per cent LTV.

“Looking at his overall situation, it should be possible to take out about £15,000, providing the rental income is sufficient. If the rental income is short, some lenders can use Mr Jain’s personal income to provide a larger mortgage.

“It may be possible to raise cash from their other buy-to-let properties if they have enough equity, and even refinance them on to better rates.”

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