why are btl mortgages so expensive??

Gorgeous_George

A typical BTL mortgage should cost 5%.

I have seen a property priced at £58K. If I could borrow £60K (house price + BTL mortgage arrangement fee) at 5% the interest repayment would be £3K per year. Rent would be £5K for 11 months (to allow 1 month for a void). In 10 years time the rent is likely to be £6.5K.

I'd be more interested if the propety was £45K or, at a push, £50K. There are so many additional costs that my rule of thumb is that a BTL is worth 100 x the monthly rent. Perhaps slightly more if a good long term fixed rate mortgage can be found.

I cannot see any Government introducing punitive tax regimes. The country needs BTL.

GG

Thrugelmir

Gorgeous_George wrote: »

I have seen a property priced at £58K. If I could borrow £60K (house price + BTL mortgage arrangement fee) at 5% the interest repayment would be £3K per year. Rent would be £5K for 11 months (to allow 1 month for a void). In 10 years time the rent is likely to be £6.5K.

Thats over a 3% compound increase in rent, which considering is paid by the tenant out of after tax income, seems optimistic in the current economic climate.

Better to wait for house prices to drop to increase yield perhaps.