re-mortgage or not re-mortgage that is hte question!?

fancyabrew

My 5yr tracker mortgage comes to an end in July and I don’t know what to do, pay some of the principle off re-mortgage or what?

Some details;

The mortgage is for £68k and I have 16yr’s left on it.

The mortgage is interest only and the current rate is 2.71% so about £160 a month

The house is probably worth around £175k

I now don’t live there as I moved a year ago about 20yds up the road to what was my parent’s house (I inherited it 3 years ago) it’s worth about £500k. I have a couple renting the property for £650 pcm

Including the next tax year I have around £55k in an ISA (this is to pay the mortgage off as its interest only) The ISA pays 3.5%

I earn @ £35k + the rental income takes me just in to the 40% tax band after allowances

The wife is a 40% tax payer but will be off for the next year on maternity leave

I’ve got around anther £30k in a saving account and around £12k in shares. (but I don’t want to touch any of this) we don’t have any other debts at all.

So ideas as to what’s best to do?

sterlingstash

A key piece of missing info - what is the rate after the 5 years comes to an end?

fancyabrew

sterlingstash wrote: »

A key piece of missing info - what is the rate after the 5 years comes to an end?

ahhh not sure I think it'll revert to Banko Dago's (Santander's) base rate what ever that might be!

Dave_Ham

Another key question, is that I am assuming this is currently a residential mortgage from when you are living there.

Have you told this lender you are renting out?

fancyabrew

Dave_Ham wrote: »

Another key question, is that I am assuming this is currently a residential mortgage from when you are living there.

Have you told this lender you are renting out?

yeah did that when we moved, the terms and everything remained the same. not sure what'll happen if/when I remortgage

sterlingstash

Santander SVR is 4.24 I think (you need to check) so you'll be paying higher interest that you'd get on savings, so would normally be worth paying down this rather than keeping cash in savings. However I am not sure about the ins and outs of BTL though, with offsetting this against profit etc which might change the picture

fancyabrew

yeah I know thats the issue, and I can offset the mortgage interest against my tax bill as well