Help!

balmoral_2

Hello all I'm in a quandry - I own a house worth £300000 and am debating whether to buy another property costing £170000 as an investment. I'd be remortgaging my house for £170000 over 10 years and renting the new property at £500 per month which would cover the cost of the monthly mortage repayments. The interest only mortgage would cost me £220000 over the 10 years plus I would then have to repay the original £170000 (probably by selling my original house and moving into the new property) Should I go for it or should I just invest in high rate fixed savings investments - I could probably invest £1000 per month over the next 3 years. What does everyone think! Regards, Bal.

hoggums

£500 per month on 170K equates to 3.5% return on your money - before you've factored in expenses and voids and the interest charges on the mortgage.

You will be very lucky to get an investment that returns at a rate higher than you'll pay on the mortgage so neither of these options looks sensible to me.

balmoral_2

hoggums wrote: »

£500 per month on 170K equates to 3.5% return on your money - before you've factored in expenses and voids and the interest charges on the mortgage.

You will be very lucky to get an investment that returns at a rate higher than you'll pay on the mortgage so neither of these options looks sensible to me.

Thank you so much for your comments. Can you think of anything else I could do. My plan was to buy something now at a good price, hope that it increases in value in ten years, sell my current house and move into the new property leaving me with approx 180000 to fund my retirement!! I wanted to make my salary work for me over the next 3 years. Perhaps I should just enjoy being mortgage-free and sell my current house in 10 years time and down-size then leaving me with a smaller amount - I just don't know!!

Kind regards, Balmoral