Mortgage on second property for self employed?

[Aerate]

Wife and I are self-employed. I am an exhibitions contractor, she teaches yoga. We have about £5k to pay off on the mortgage for our £400k house. We would like to buy another house nearby that is going for £320k. How can we get a mortgage? Should we renegotiate our current mortgage or should we pay it off and use our house as security on the new mortgage (which we don't have a huge deposit for)?

[Sarnie]

What would the second property be used for?

[Aerate]

We would like to move into the second house as it is within walking distance of the boys school.

[Sarnie]

And what would you do with the current house?

[Aerate]

Sorry - I really should have given you the full picture. We would let out our current house hopefully realising £1800 PCM.

[Sarnie]

Aerate said:

Sorry - I really should have given you the full picture. We would let out our current house hopefully realising £1800 PCM.

Ok, so you could take a Let-To-Buy mortgage on the current property of up to £300k (75% of the property value) leaving you circa £20k or so to take as a residential mortgage on the new property. Or you can take less out of the LTB and more on the residential mortgage as the rates will be lower than the LTB product............