Buy to let mortgage advice

Gorgeous_George

£100K on BTL interest only at 5% gives £5K to offset against rental income for tax purposes.

Pay off £10K and you can offset just £4.5K and therefore pay more tax, say £100 more for a 20% tax payer. If the OP has other debts attracting more than 5% interest (example rate only) then it is more profitable to pay that down and keep the maximum BTL debt. My own BTL mortgage is 1.89% at the moment and guess what, I am not paying it down. I just save the money instead at an average rate of 4.5% after tax.

When you apply for a mortgage it is pre tax rental income that needs to cover the mortgage by 125% - nothing to do with profits (directly at least).

GG

Wh05apk

Guys, please don't be obsessed with paying debt down, the op stated that he is struggling to finance them, so I really can't see there being any spare cash to reduce down. He simply asked about whether to stay on SVR or not, not for judgemental posts about what or what not he should hypothetically do.

If there is any spare cash in time, then surely it makes sense to build a buffer first, so that if rates rise, or the properties are empty there is money to meet the mortgage repayments.

CloudCuckooLand

OP. Perhaps it would be an idea if you did start treating it as a business, it may give a different slant on things - getting more hard-nosed about it, might lead you to realise you can bump the rental up, leading to it being more profitable - able to weather a long wait for prices to rise, for example.

Or, conversely, being more businesslike = less emotionally attached, allowing you to "let it go", without feeling obliged to hang on grimly for whatever personal reasons rom the past.

Who5apk, the OP didn't ask for tax advice, but you gave it anyway...who knows which opinion/comment/advice will strike a chord and be of use to the OP, until they are stated?

He did ask for "any thoughts"...

Wh05apk

CloudCuckooLand wrote: »

OP.
Who5apk, the OP didn't ask for tax advice, but you gave it anyway...who knows which opinion/comment/advice will strike a chord and be of use to the OP, until they are stated?

He did ask for "any thoughts"...

I only bought tax into it, as it was suggested he "needs to repay" debt, so could possibly not be the best thing to do.

I assumed "any thoughts" related to his question re SVR, not judgemental comments about his ability to run a business, if "any thoughts" is completely open, then "don't eat yellow snow" is always a good one.