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Buy to let
ryan86uk
Posts: 173 Forumite
Why do most people opt for Interest only on a buy to let mortgage? Surely it would be beneficial to use a repayment basis mortgage?
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Comments
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a repayment mortgage means higher monthly payments than an interest only one0
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a repayment mortgage means higher monthly payments than an interest only one
Agreed and a lot of BTL landlords can't afford a repayment mortgage.
But if you can afford a repayment mortgage then the decision depends on [FONT="] the BTL mortgage rate and the investment rate you could get on your savings if you invested them instead of using them to pay off your mortgage. It also depends on the rate of tax you pay.
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You only get tax relief on interest payments - not capital. Especially at times of low interest rates it makes sense to pay interest only and save to pay off the capital.
Dangerous if the interest rate rises and you can't pay off the capital to make it manageable.0 -
Let's turn it round then. Why do you think repayment would be a better way?Surely it would be beneficial to use a repayment basis mortgage?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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