Releasing equity from a buy-to-let to buy the next one.

How it works

You remortgage for more than you currently owe, up to the lender's maximum loan-to-value (usually 75%) and subject to the rent supporting the bigger loan. The surplus is paid to you on completion. On a property worth £300,000 with a £150,000 mortgage, a remortgage at 75% gives £225,000, so £75,000 released, less fees. The equity release calculator does the sum.

What lenders ask

• What the money is for. A deposit on another buy-to-let, home improvements, repaying other debts, or business purposes are all normally acceptable. Some lenders will not lend for certain purposes (speculative investments, gambling debts). "Buying another property" is the usual answer and is fine.
• Does the rent support the bigger loan? The full stress test applies to the new, larger amount. This is where most capital-raising cases are limited: the value may allow £225,000 but the rent only £190,000. Rental cover.
• Loan-to-value. 75% for most; a few to 80%. The best rates are at 65% or below, so releasing every last pound can cost you on rate.

The maths of the next purchase

Releasing £75,000 at 5% costs £312 a month in extra interest on the first property. If the new property costs £250,000, needs a £62,500 deposit (25%), and rents at £1,250, its own mortgage of £187,500 at 5% costs £781 a month. Both properties need to wash their faces after the new interest, tax, voids and maintenance. Many landlords find the sums tighter than they did in the low-rate years; run them honestly before you start.

Stamp duty on the next one

An additional property carries the surcharge: 5 percentage points on every band in England and Northern Ireland, 8% Additional Dwelling Supplement in Scotland, higher-rate bands in Wales. On a £250,000 purchase in England that is £15,000. It is a cost of the deposit, not a cost of the mortgage, but it comes out of the same pot.

Alternatives to a full remortgage

• Further advance from your current lender: extra borrowing on top of the existing deal, assessed as new lending, sometimes at a different rate. Quicker, and it avoids an early repayment charge if you are mid-deal.
• Second charge buy-to-let loan: a separate loan behind the first mortgage. Higher rate, but leaves a good first-charge deal untouched.
• Bridging for a quick purchase (an auction, a below-market deal) with the intention of refinancing onto buy-to-let after: expensive, short-term, and only sensible with a clear exit.

If you are raising money on a personally owned property to buy the next one through a limited company, tell the broker; the money can be lent to the company as a director's loan, and the structure matters for tax.

A note on the numbers. Rental cover ratios, stress rates, loan-to-value limits and fees are typical of the market at the time of writing (2026) and differ from lender to lender. Tax rules are for individuals and companies resident in the UK and change with each Budget. This is general information, not advice: a broker will tell you what applies to your property, and an accountant what applies to your tax.