Mortgage experts - is this possible?

I'm fairly certain that I've misunderstood the estate agent who gave us a valuation on our little one bed a week ago, as we were looking at a two bed in the area that was around the same money due to the rooms being smaller and the area a bit more "studenty". As it turns out, having viewed the two bed we've decided to stay put - for the moment.

At one point the Agent asked how much equity we had in our current place:

To keep the numbers simple (though I don't mind going exact if I need to later):

Our house value: £100k (don't I fucking wish in Brighton )

Equity in our house c. £44k.

He was seeming to suggest that with this % of equity, we could throw our place onto a BTL mortgage and still have the means to buy a nicer two bed than the one we saw using this equity. In relative terms, this two bed based on the imagined above figures would be c.£130 - £140k.

Between us, not as individuals, we earn a little over UK average as I'm a filthy stoodent again (albeit working p/t). The market value letting rent of our property would be around £200 per month more than we're currently paying on the mortgage for it.

So in conclusion, is there a mortgage mechanism in place that would allow us to buy a two bed while retaining our one bed on a BTL? Or have I completely misunderstood the agent? Or was he just talking nonsense to get me to sign on the dotted line as he wanted us to commit to them marketing our property for us there and then?

I hope all the above makes sense. TIA for any answers

I dunno, but I'm interested to know

If you have 44% equity you would be in need of a 54% mortgage. Presumably your income wouldn't permit this to be repayment and you would want interest only. Not only that, it's BTL.

While your LTE ratio will be quite good the fact that you'd want interest only and BTL will make it harder to get a mortgage and you will be paying more interest, at a guess about 6%. People who have interest only mortgages have been relying on receiving rent that covers the interest payments with capital appreciation as their profit at the end (or keeping it a lifetime as a pension plan - see other recent thread). Really, a lot depends on whether you can get a good mortgage deal, not so easy at the moment.

Note you can only use this equity once, you can't use it to buy your new house AND use it to get a smaller mortgage enabling you to BTL. And you would be taxed on any income over and above costs on BTL rent.

IMHO BTL is OK if you have money to invest but not if you have to borrow most of it. In your place I'd sell the small house and use the proceeds to buy your own place. I think the BTL horse has pretty much fled the stable now.

You really need to speak to an independant finacial advisor.

When I bought my house my financial advisor remotgaged my flat to release equity to be used as a deposit on the house. At the time it was a normal mortgage on the flat then when we bought the house and rented the flat we told the mortgage company who for a £200 fee sent me a letter agreeing that the flat could be rented. So it is still on a "normal" tracker mortgage not a BTL which are more expensive.

I've got nearing 25% equity in each property now and increasing.