Mortgage advice, two properties.

We have a 1 bed flat currently valued around £65K, owned outright, which is now in the process of being rented out, we expect to get around £375/mth after management fees.

We would like to purchase a house, valued somewhere around £200K.

Joint income is £50K and we have £20K savings.

I understand if the Let property is mortgaged, the interest payments on the mortgage can be offset against the income tax - is that correct?

So we are thinking of getting a ~ 75% LTV buy-to-let mortgage on the Flat to make ~ £45K available, then use this with the 20K as a deposit on a £200K house - so that this mortgage LTV is lower with a better rate and the rental income tax bill will be significanlty reduced.

We will need to do some calculations to take into account set up fees, BTL rates etc, but does this seem like the best approach?

Other than a single 90% LTV mortgage on the house, are there any other alternatives? Do any mortgage companies secure a loan on two properties? - i.e. could we use the equity in the flat as a deposit without having to get a separate mortgage?

Any feedback / suggestions appreciated.