Buy-to-Let Equity Release

16-October-2025

16-October-2025 14:30

in Private clients

by Sam Hodgson

A professional mortgage broker's hand holding a set of keys over a model house, symbolizing the release of equity from a buy-to-let property.

Being a landlord in the UK can often feel like a thankless task, sold to you on a dream of ‘making a good investment in the UK property market’. When there are good days, they’re great, but the bad days are depressing with sleepless nights driven by a multitude of worries.

What happened to that promise? Do you have to wait until your mortgage term is finished before you realise any sort of money from your hard work and investment? Or do you just have to keep ploughing time and money into your BTL property for years and years with nothing to show for it?

At Clifton Private Finance, we understand your frustration - and we have that bright light you’re looking for. Let’s explore how to use the money you have locked in your BTL property - and how to use it for both a stable future and an exciting today.

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Building up Equity in Your BTL

Unless you are one of the lucky landlords with first rate tenants, a property that seems to keep going with little to no maintenance, and a nice chunk of rent that’s paying dividends every month, the chances are that you look at your BTL as more of a long-term investment than a short-term cash cow.

And that’s perfectly reasonable. It’s the same for thousands of landlords across the UK.

In reality, for most BTL property owners, the money that is scraped off the top of the rental income each month is ploughed right back into the property, paying to do those annual checks and regular maintenance, sucked away through tax, or put carefully aside in case the roof falls in.

The reward is in the market value going up - you paid £100k for the house, and when you come to sell it, it’ll be worth two to three times that, so there’s the pay off.

But do you have to wait to get that pay off?

Equity in a BTL property is different from that in your residential home.

With a repayment mortgage, equity builds up slowly each month as you chip away at the mortgage balance. By the time you’ve reached the end of the term, it’s paid off in full and you have 100% equity in the building.

But an interest-only BTL mortgage is different. Those low-cost monthly payments mean you’re not lowering the balance of the loan at all. Equity is created purely by market forces.

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Rental Properties with 100% Equity

One other scenario is that you owned your home in full before you turned it into a rental - a mortgage-free second home that’s been let out to provide an income.

Releasing equity in this situation is the perfect way to access funds without needing to sell. Properties not already leveraged with a mortgage are excellent assets for capital security, allowing you to maximise the amount of money for your use.

Why Release Equity from Your Rental Home?

Unlocking the cash in your property can be done for a wide range of reasons. It’s your money and it comes with no significant restrictions on use.

Typically, capital raised against a BTL property is done for one of the following purposes:

Renovations

Adding value to your BTL is an excellent use for the money, giving you the chance to modernise and expand in a way that makes it more desirable.

When well-considered, renovating your property can boost the market value by a larger amount than the cost of the work, resulting in a win-win scenario. When your property is more attractive to prospective tenants, you can reasonably increase the rent, improving your monthly income, and it will sell for more when the time comes.

Not only that, but a freshly renovated property is unlikely to need continued maintenance in the next few years, giving you some time where the rental income can breathe without being squeezed by ongoing needs.

Expanding Your Property Empire

If landlording is proving to be an enjoyable occupation, then buying a second BTL property could be a wise investment. Leveraging the equity you have built up in your first BTL to obtain another is a fantastic future-thinking use of the money.

For landlords who already have a significant portfolio of properties, a more advanced portfolio mortgage will offer increased buying power and simpler administration.

An umbrella mortgage that combines multiple buy-to-lets into a single structure, a portfolio mortgage is excellent for landlords with four or more properties, allowing you to leverage the equity from existing properties to invest in further rentals with minimal paperwork.

Debt Consolidation

One of the great advantages of property-based loans, such as mortgages and second-charge secured loans, is that they have extremely low interest rates compared to credit cards, overdrafts, vehicle finance, and unsecured loans.

If you have built up debt across a selection of these more expensive products, consolidating them by using the equity in your property will provide a low-cost solution that can save hundreds, or even thousands of pounds in interest every month.

Helping Family Members onto the Property Ladder

It’s difficult for many younger families to buy a home in the UK, struggling to save for a deposit while renting. Your equity can be used to give them the boost they need.

It is important to understand, however, that mortgage restrictions mean that any money you provide for a family member’s deposit must be presented as a gift without obligation to pay it back.

You will not gain equity in their property or be able to ask for a repayment schedule.

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Investing in Business

Some lenders will restrict you from using a property mortgage to invest into a business, so it’s worth discussing this upfront if it’s your intention.

With those lenders who will, however, releasing the equity from your home to start a new business or give an existing one a helping hand, is considered viable.

Buying a Car or Other Large Purchase

With car finance typically set to far higher interest rates than mortgages, it only makes sense to leverage your home to get car finance rather than paying more in interest through a hire purchase agreement.

Holiday of a Lifetime

Many BTL homeowners simply want a well-deserved break. It’s your money and there’s no reason not to use some of it to really live your life.

Using your property equity to fund a trip of a lifetime is a worthwhile experience, giving you time and breathing space that might otherwise be impossible to ever get - though we always advise being responsible with your borrowing.

How is it Done? The Best Ways to Release Equity

There are a range of ways to release the capital tied up in your BTL home. At Clifton Private Finance, we’re experienced in all of them.

Our advisors will consider your needs in a holistic fashion, building up an idea of your wants and needs, and balancing that against the options available to you - an early chat can quickly result in you getting the money you’re after.

Remortgage

The ‘classic’ equity release strategy, and still one of the best, is a remortgage. This is a full, first-charge loan secured against your property that replaces (or pays off) any existing mortgage or loans, with some left over for you to use for other purposes.

Remortgaging when you have additional equity in your property will give you the money you’re after while structuring it with:

The lowest possible rates - Mortgages are among the strongest loans possible, with rates that represent the low risk of a property-secured loan.
Low monthly cost - Low interest rates help keep monthly repayments down. You can structure your BTL remortgage as an interest-only mortgage to maximise your rental profits, or as a repayment mortgage to increase equity over time.
Flexible term length - Mortgages can be tailored to your exact need, providing you with a guaranteed exit when you need it. Plan to have your mortgage end just before retirement, shrink it to have it repaid early, or stretch it a little longer to minimise the monthly impact.
High loan-to-value - BTL mortgages are typically available at 75% LTV, giving you the maximum equity release. Should you need more capital, speak to a CPF advisor; we work with specialist lenders who will look at your situation in detail to provide the best solution.

Second-Charge Loan

A second-charge loan, or homeowner loan, is a secondary mortgage that doesn’t replace the existing one, running alongside it. This has the advantage of not disrupting your current mortgage rate, and minimising the valuation and affordability tests that come with a full remortgage.

Second-charge mortgages are also structured separately from your primary mortgage, giving you the opportunity to choose between interest-only and capital repayment options, or to set a different term length so it is repaid sooner.

Bridging Finance

Designed as a rapid funding solution to take advantage of any opportunities that arise - especially when purchasing property, bridging finance can utilise your equity in your BTL to give you unparalleled buying power at auction or cash buyer flexibility during a home move.

Bridging finance is designed as a short-term solution that doesn’t have monthly repayments, but instead is repaid in a single lump sum as an exit strategy once your plans come to fruition, often through traditional refinancing. Examples include:

Buying a House at Auction

You see a property at auction that is in need of renovation but offers an incredible investment opportunity, only you have to make a decision quickly, with a deposit required immediately upon winning the bid, and the balance paid within 28 days.

A standard mortgage is impossible - with the house in such a bad state, it’s unsuitable for human habitation and mortgage companies won’t touch it. You need to have the cash, and you need it quickly!

Six months down the line, you’ve got the house, you’ve done the refurbishments, and you’re ready to exit the bridging loan with a standard mortgage. You take out an interest-only BTL mortgage on your new, modernised, and very habitable property, pay off the bridging loan in full, and have increased your rental empire with an incredible investment that’s ready to make you a solid rental yield today and significant return on investment in the future.

Breaking the Chain

You’re moving house and have found a dream property to move into. Unfortunately, just as you were ready to put everything in place, your buyers for your current home pull out.

A few months later - after having moved in to your exciting new house - you sell your old home for above the original asking price, pay off the bridging loan, and walk away with greater proceeds and having experienced a smooth exchange.

Pros and Cons of BTL Equity Release

As with all loans there are some considerations to think about before going forward. At Clifton Private Finance, we’re here to discuss the various options with you and make sure you make an informed decision. Some things to take into account are:

Your house is at risk… - You see it all the time, but it does have to be considered! Your property may be repossessed if you do not keep up repayments on your mortgage.
Interest rates must be considered - If you remortgage, you will replace your original mortgage and the interest rates that come with it. If you had a particularly good deal and today’s rates are not as good as your existing ones, then it may be sensible to look at a second-charge mortgage instead, leaving the primary one untouched and keeping its good rate. Even a single percentage point increase in interest rates can make a large difference to your monthly repayments.
There’s some paperwork and your credit will be checked - At Clifton Private Finance, we make the process as smooth as possible, but there is a reasonable amount of administration when releasing equity from your property, from valuations to lender’s affordability tests. These differ depending on the type of loan, but may be considerable. It’s worth talking to us in advance to ensure everything goes without a hitch.
Some loans are more flexible than others - Make sure you don’t get locked into a loan with a long fixed term and unreasonable early repayment charges as this could leave you unable to remortgage in the future. Your CPF advisor will discuss this with you in depth before you sign any agreement.

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That all said…

Interest rates are low - Loans secured on property are amongst the cheapest out there, with low interest rates and a competitive market for flexibility. Compared to credit cards, vehicle finance, or unsecured loans, the difference is vast!
Money opens opportunities - Leaving your money locked in your rental property limits the things you can do with your life, and we only get one life! Equity release lets you use your hard earned cash to boost your life today instead of waiting until you’re too old to make good use of it.
Clifton Private Finance make it easy - The hardest things about releasing equity are finding a good deal and undertaking the administration and guess what? We do all that for you! When you come to Clifton Private Finance, we take all the hard work away and leave you able to enjoy your money.

How to Release Equity in Your Buy-to-Let

Want to get your hands on that built-up cash as soon as possible? Call Clifton Private Finance. We’ll simplify the process and make the whole experience a joy:

Finding a lender - We are a whole-of-market broker, meaning we have access to all the mortgage lenders in the UK, from high-street banks to specialist lenders offering tailored solutions that meet your exact needs. We’ll find you the best deals and evaluate them against each other so you can simply pick what’s best for you.
Preparing the paperwork - While we can’t dig around your files for you, we’ll talk you through what you need and help you get everything in order before an application is made.
Making an application - Worried about getting something wrong? Don’t be. Our experts know what they’re doing and will get every i dotted and every t crossed for you.
Waiting - We’re alongside for the whole ride and will reassure you during the nerve-wracking waiting period, while your lender does their valuations and underwriting.
Celebrating - Not that we don’t love cracking open the champagne, but we’ll leave this bit to you and your family. Once the money is cleared, it’s yours to use as you like.
Repaying - At Clifton Private Finance, we don’t disappear into the shadows. We’re here to help you if you ever get stuck with a repayment or need to refinance a few years in the future. Just let us know.