Pay off mortgage early or buy another house?

holly_hobby

Yep, whilst your mge rate is higher than any net savings you can achieve, overpay within your max contractual paramaters.

If you dont wish to release the finance from your own home and essentially buy your BTL with a saved deposit and dedicated BTL mortgage, thats fine.

If as you suggest, and Kings has rightly picked up on, you pch the property without finance - then you won't have the benefit (or indeed outlay) of the mge interest. (swings in round abouts really, and is more advantageous if you are exposed to HRT).

In choosing your property, consider your area and target audience, local rents for similar properties in the area, and whether the achieveable rent (when considering your tied up capital, and after any management fees, tax & insurances, etc), will be worth the outlay, responsibilities and hassel, etc.

Hope this helps .... and the very best of luck if you decide to dip your toe in landlord waters .. !!

Wish you well...

Holly x

Thrugelmir

dazbear wrote: »

Basically I am self employed and am currently not paying into a pension - this was my alternative plan.

On the basis that it is. What's your exit route?

Whilst interest paid is offsetable against rental income. You've still the capital balance on the mortgage to repay. This can only be repaid from profit after tax has been paid, i.e. free cash flow.

The BTL boom from 2000 -2007 was built on rapidly appreciating property prices. Leveraging with debt isn't such a good proposition now.

The last point to consider is that BTL is a business not an investment.

nickp564

From my experience I can say, there are financial calculators which show you in detail how to payoff mortgage early. The calculator which I use is " Smart Loan Calculator Pro " which is available in app store for 2 bucks. It is awsome. It is not for one time. It is life time useful smart calculator. Give it a try. I guarantee, you would thank me after you download and check it. After checking this, I realized how easy to payoff martgage early.

dimbo61

You can also use "whatsthecost" for free and pay the 2 BUCKS off the mortgage.
The Yanks are coming !!!!