Buy To Let Mortgage coming to end - tax implications

jayencee

I currently have a buy to let mortage (interest only) which comes to the end of its term in 2010. Once the endowments have paid out, there will probably be a smallish shortfall.

Can I then re-mortgage the property for as much as I can release in equity but continue to claim the interest payments against tax? or does it depend on what I will be using the money for?

Rolo_Tomasi

You need to look at the original cost of the property and can claim tax relief on the interst of any loan up to this amount. It does not matter what the loan is used for. If you remortage for an amount greater than the original cost then you have to adjust the interest climed on your tax return.

jayencee

So if I understand you right, I can only re-mortgage for the amount I originally borrowed 25 years ago?

MarkyMarkD

No. That clearly isn't what Rolo said. You can remortgage for any amount you can get the lender to lend you. But you can only offset interest for tax purposes up to the original value of the property when it was first let - which is probably more than your original mortgage value, even assuming you let it immediately on purchasing it 25 years ago.

jayencee

Ahh, right, thanks for the clarification!