Some Advice Please?

londondealer

Just after a little bit of advice really.

I currently have two mortgages on two investment properties I own. Total amounting debt somewhere in the region of 280K. I decided to buy a couple of flats as my company pension is dire.

Anyway up until recently I was making overpayments on one of the mortgages until someone told me not to do it anymore the reason being that its better to save the money and make a bulk payment when I retire from the tax point of view.

If I reduce the mortages I will be paying more in tax on the income and my salary whilst I am still working.

Really appreciate any feedback.

kingstreet

Only mortgage interest payments (together with other expenses but not capital repayments) can be offset against the rental income for tax purposes. If more of the rent is left over due to lower interest payments then the amount added to your income will be increasing the tax you'll pay.

londondealer

Thanks Kingstreet the advice I got was accurate then I will stop making the overpayments.

dimbo61

you need to look at the big picture and consider the LTV of both properties!
current deals and when they end,TAX implications and I guess you are a higher rate tax payer
Savings rates both Tax free ISA,s and the interest rate you are paying on your mortgages
Have you got an accountant ?