Interest Only Mortgage for Rented property?

shella_n

Hi there

Not sure if I am posting this in the right forum but here we go...

We have just been offered a job abroad and are planning on renting out our property. The rent just about covers the mortgage at the moment as we are on a 0.99% above base mortgage (our mortgage lender has approved us renting for 2 years). What I am worried about is when the rates go up and I am wondering if we remortaged what our options would be?

Is there such a thing as an interest only mortgage now days for this type of situation. Weve for about 20% equity in case thats relevant.

Would love to hear any views on this as it will help us decide whether the risk is too high and we should sell instead.

Many thanks in advance

Michelle

dimbo61

You can only rent out a property for a max of 3 years before you have capital gains tax to pay on the whole increase in the value of the property!
By that I mean that say you lived in the house for 5 years and then rent out for 4 years you would pay CG tax on the increase in value for the whole period.
So you need to sell in 2 years time or move back in the property.
If you tried to remortgage now it would be on a Buy TO LET basis and need 25/35% deposit and higher interest rate!