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BTL advice please
Comments
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At those ratespay the BTL off first. Even as a 40% tax payer you should be better off.0
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Its the purpose of the loan that counts, not where it is secured.
Many people who bought BTL by increasing their mortgage on their residential home for the deposit and took a BTL mortgage for the remainder claim the interest on both as an expense of the letting. The main restriction is that the total size of the loan (that interest is claimed to be an expense) is restricted to the value of the property when first let.
With the right documentation you could be able to reduce the mortgage on the higher interest BTL but still claiming the interest on the total value of the property when you first let it. The amount of interest drops (as the rate is lower), but your payments also drop.
example
You increase your home mortgage by 20k and take a BTL mortgage for 80k to buy a property to let out, for 100k. All 100k is an allowable mortgage as the purpose of the loans were to fund the BTL. Expressed correctly I don't see why you can't reduce the BTL mortgage and take more of your resi mortgage as an expense of the letting.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
That sounds good, silvercar.
What sort of documentation would prove to hmrc that the purpose of a portion of the residential mortgage has changed to BTL finance? Could Kate just notify her residential mortgage provider of this and get some sort of acknowledgement back?0
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