I have a new client who has generated funds to buy a rental property by increasing the mortgage on his home. His mortgage was almost paid off and instead of looking to take out a second mortgage to buy the rental property, he has increased his home mortgage by borrowing about £60,000 to buy the rental property outright.
He told his mortgage lender what he was borrowing the money for and they let him. I think he has been badly advised as I doubt I can use the mortgage interest as an expense now. Can anyone confirm if I am correct please. Even if it could be used, it will be difficult (but not impossible)to work out exactly as he had about £2,000 still on the mortgage.