PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Renting a house I will inherit. Novice, costs breakdown

124»

Comments

  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    G_M wrote: »
    Because the mortgage interest payments are tax deductable.

    You'll need to do your own calculations to decide whether the tax savings compensate for the mortgage costs....

    Surely it's cheapest not to borrow at all if borrowing is not needed.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    ViolaLass wrote: »
    Surely it's cheapest not to borrow at all if borrowing is not needed.

    agreed,
    do not let the tax tail wag the dog

    the amount you save in paying less tax is always wiped out by the amount of interest paid on the loan, unless you can invest the borrowed money at a better interest rate than you are paying on the loan ... but then factor in any capital repayments to clear the debt!
  • dimbo61
    dimbo61 Posts: 13,716 Forumite
    Name Dropper Photogenic First Anniversary First Post
    The OP is paying interest on his mortgage for his home!
    Now if he can borrow say £75K IO mortgage for the rental property and use that to pay off his home mortgage.
    Interest is tax deductable from profit he makes.
    I did not make up the rules.
    much rather pay for a good accountant than a poor leeting agent.
    I also tend to be OTT with smoke alarms, CO2 alarms ( 6 year old girl died from CO2 poisoning in a tent ) fire doors ( hence only 2 storey) gas safety certificate, electric safety certificate PAT testing.
    Do you want to stand up in court and explain why you did not bother?
    Please read Landlord& Buy-to-let magazine issue32 2012
  • Werdnal
    Werdnal Posts: 3,780 Forumite
    First Anniversary Combo Breaker
    edited 7 May 2012 at 4:17PM
    dimbo61 wrote: »
    I also tend to be OTT with smoke alarms, CO2 alarms

    As I said before - its CO - CO2 is carbon dioxide!

    And as I also said before, they only work if tenant changes batteries. How do you enforce this? If you supply them, do you go round every month and "press the button" to try them?

    I currently have a fully installed heat detecting sprinkler system in my flat, but when I had a battery smoke alarm, tenant chucked it out because he wanted to smoke in the flat (against AST clause ...) and it kept going off!
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    dimbo61 wrote: »
    The OP is paying interest on his mortgage for his home!
    Now if he can borrow say £75K IO mortgage for the rental property and use that to pay off his home mortgage.
    Interest is tax deductable from profit he makes.
    I did not make up the rules.

    As I understand it, the mortgage doesn't actually have to be on the let property for the interest to be tax deductable, in which case transferring the debt to a BTL mortgage, with the higher rates that involves, would be throwing money away.
  • Old_Git
    Old_Git Posts: 4,744 Forumite
    First Post First Anniversary Mortgage-free Glee! Cashback Cashier
    as I understand it the interest on a BTL is deductable only for the amount you payed for the property .If the property cost zero then I cant see any way a BTL mortgage would be tax deductable .
    "Do not regret growing older, it's a privilege denied to many"
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards