Mortgage - which mortgage to pay down -advice sought please

bigadaj

If you have tried to sell and can't then the obvious answer is that it is worth less. You are taking a huge gamble on the housing market and that is really down to your attitude to risk. Would seem sensible to pay down a chunk of your own mortgage due to the high rate and The fact that you have no repayment plan in place.

I wouldn't get too hung up on tax and mortgage interest, you only pay tax on a profit and you are currently highly geared, reducing some debt on your own property would make sense.

POPPYOSCAR

Goodadvice75 wrote: »

Hi,

Many thanks for the further helpful replies and sorry for my tardiness coming back to this. (Procrastination and hiding away from this are my two BIGGEST problems....!)

The £80k I've mentioned is savings I don't need access to and does not include another sum which I will be keeping back to (hopefully) cover rental void periods and any looming disasters (car, boiler) etc.

LTVs are difficult to work out the way the market is, but all three properties have lost money. Trying to be realistic(!), I've added in what I think the sale value figures are in blue.

BTL 1: £141K loan, 5.79% rate (pay back c. £680 pcm (got figure wrong first time) (SALE VALUE AROUND £180K)

BTL 2: £120K loan, 2.45% rate (pay back £243 pcm) (SALE VALUE AROUND £140K)

Own house: £118K loan, 5.47% rate (pay back £538 pcm) (SALE VALUE AROUND £145K)

I think I forgot to say that my residential mortgage is also interest only which I know is stupid and I'm just throwing money away. Having made so many bad decisions I'd really welcome some advice as to the best use to put this £80K to now.

I didn't understand the point about my residential mortgage having tax relief - please can any one explain further?

Re the lengths of the terms - I think they should all be around 20 years. I don't have any policies etc in place to pay off any of the mortgages, only my savings and reliance upon them selling!!

If there's any other info needed please let me know and I'll post back. All three mortgages are out of their fixed terms so I am free to make overpayments without penalty.

Many thanks again for the contributions/advice which will hopefully help me reach a decision and ACT on it!!

I think the poster missed out the word no!!

dimbo61

Sorry yes I missed out the word NO
You get tax relief on the BTL mortgages but not the one for your home.
As the rate is 5.47% and also Interest only I would pay a lump sum off that but keep a Large savings pot

Goodadvice75

Hi,

Thanks to all for the additional replies. That seems to be a consensus then, so I will pay off a chunk now and then keep chipping away at my own residential mortgage. And try again in the Spring to sell BTL1 - keeping fingers firmly crossed! But if it still doesn't move, then maybe look to pay a chunk off of that BTL1 mortgage so that I can remortgage that one to a better rate than the current rate.

Thanks again for everyone's advice.