Best Buy to Let Interest Rate

new_home_owner_3

Pincher wrote: »

Even in its heyday, BTL mortgages attracted a 1% premium over residential mortgages.

If a residential mortgage was at 4%, and the BTL 5% interest rate, and you were paying 20% income tax, you effectively end up paying 4% interest because of the tax deduction. If you were paying 40% tax, you only pay 3%, effectively.

yes but some of the fees are massive 3.5% fee :eek: thats on a one year deal so if you want a btl mortgage the fee spread over 12 months on a 100,000 pound mortgage is 290 pound a month and you have your repayments on top.

I dont think paying 1 percent on top is that bad for a btl mortgage but when you add a 3.5% fee, your more or less doubling your mortgage payments.

VIGILANT22

Professional landlords will understand arrangement fees can be offset.......Costs incurred in obtaining loan finance for a rental business are generally deductible in computing rental business profits provided they relate wholly and exclusively to property let out on a commercial basis. These costs include loan fees, commissions, guarantee fees and fees in connection with the security of a loan(ICTA88/S77 or ITTOIA05/S272).

new_home_owner_3

i tell you what if interest rates go up in the next year and a load of landlords need new mortgages then you will see the panic.

A lot are on trackers, and i for one would not wanting to be looking for a new btl deal at the moment, thats why i dont think you see many btl properties being bought at the moment, landlords just cant afford the deals that are currently out.

Thrugelmir

VIGILANT22 wrote: »

Professional landlords will understand arrangement fees can be offset.......Costs incurred in obtaining loan finance for a rental business are generally deductible in computing rental business profits provided they relate wholly and exclusively to property let out on a commercial basis. These costs include loan fees, commissions, guarantee fees and fees in connection with the security of a loan(ICTA88/S77 or ITTOIA05/S272).

The majority of expenses that relate to the actual running of a business are tax deductible.

However to pay tax , you need to make a taxable profit.

Something which hardly ever gets a mention........

scottn

James, welcome!

You said you had 3 properties currently, how are these financed? I would approach your current lender to see what they may be able to offer you for adding another property to your portfolio.

My local IFA is whole of the market and charges about 300-400 in fees if you obtain a mortgage through them.