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Payy off chunk of mortgage or buy another?

Amsterdam_Paul
Posts: 2 Newbie
I have a question to pose.
I own a property with a remaining 130k mortgage to pay off. In august I will go to a variable rate mortgage and will at this time be elligible to pay an interest / penalty free cash payment ont he mortgage.
The property is currently rented out (on an ex-pat but to let mortgage) and basically the rent recieved covers exactly the mortgage payments with steady tenant for past 2 years.
I have some savings now and have the decision to make to either pake a payment and basically half my mortgage payments or use the same cash to make a deposit on another property to again let out and let the tennants pay my mortgages.
The above is assuming the banks loan me money again...
I am at the stage to toss a coin to know which is the best option...
Any advice would be appreciated.
I own a property with a remaining 130k mortgage to pay off. In august I will go to a variable rate mortgage and will at this time be elligible to pay an interest / penalty free cash payment ont he mortgage.
The property is currently rented out (on an ex-pat but to let mortgage) and basically the rent recieved covers exactly the mortgage payments with steady tenant for past 2 years.
I have some savings now and have the decision to make to either pake a payment and basically half my mortgage payments or use the same cash to make a deposit on another property to again let out and let the tennants pay my mortgages.
The above is assuming the banks loan me money again...
I am at the stage to toss a coin to know which is the best option...
Any advice would be appreciated.
0
Comments
-
If you pay off the mortgage, you will not be able to offset it against your tax bill. You ARE declaring the rent to HMRC yes?
On that subject, have you got HMRC auhority to receive the rent gross of tax, or does it go via an England-based agent? More here.
If you think property investment is currently wise, then go for a 2nd property, using your deposit and a top-up BTL mortgage. But bear in mind it is a long term invetment, and prices might drop before they rise.
Alternatively, reducing your mortgage (albeit at the cost of tax write-off) will give you an income stream from the rent, and protect you against unexpected expenses (tenant leaves = void; boiler blows up; roof needs renewing)
More here on renting.0 -
G_M,
Thanks for the reply,
As to offsetting against my income. I dont have tax liabilities in the UK apart the rent from the house which per annum is actually below the threshold for taxes. the rent goes via a UK based agent.
I am thinking of the secons property on a smaller, one bed scale as the mortgage will be minimal, so lessen my exposure on mortgage, but I am not keen on the appartment one bed type accomodation as usually have a higher turnover of tennants and can mean lets say lower standard of tennant who may not treat the place well...
I have some decisions to make !0
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