Cheaper Remortgage

bose_2

I have recently re mortgaged my property to purchase another smaller property to rent out and paid cash for the smaller property to own it out right -I now rent this propety out and use all money recieved off tenants to pay off my existing mortgage and also pay towards the mortgae myself -I have since been advised that I should have bought the new property on a buy to let mortgage due to tax reasons. Can anyone help and let me know the implications of keeping my two houses on the one mortgage.

UK007BullDog

You only have one house on a mortgage.

The second house you bought you kinda cheated (but really just hurt yourself now) as it should have been a btl mortgage where the interest percentage is higher than a residential mortgage.

Also for tax purposes it is better to do a btl straight away as you can offset costs (not stamp duty though), over the profit you are making. So every repair, purchase costs, can be offset the tax you are due from the profit you have made. What you need is to get yourself a book and read up on the tax savings made from btl. Or get an accountant who specialises in this, the cost for an accountant can also be offset against the profit.

HTH