self assessment help please

jamesd

One way to get advantage from that mortgage is if the reduction in income is for a higher rate tax payer and the interest or dividends from savings and investments is for a zero or basic rate tax payer.

No need to use a BTL mortgage, or course. A normal residential mortgage on the poster's own home can be used to fund a withdrawing of capital from the BTL business. That'll be cheaper than a BTL mortgage.

heretolearn_2

I wouldn't advise anyone to get into all that at the moment.

Yes, if you are smart enough overall, and can juggle the mortgage and savings interest rates in the right way (not easy at the moment with high mortgage interest and !!!!!! all savings interest) you can end up with a small amount of extra money. However,

1) The mortgage still needs to be paid out every month. Unless someone is running a business out of this, it's much simpler and better for the pocket on a day to day basis, to not have a mortgage to pay out every month.

2) An interest only mortgage needs to be paid off in full at the end of the term. Either by use of an endowment (additional cost) or by selling the property. They may not wish to ever sell the property. When they do there will be capital gains tax to pay. Also there's no guarantee it won't have lost value and they will end up in negative equity, with no property, and still owing a debt to the bank.

Really not worth the risk/faff for a potential small gain.

Lots and lots of small 'property investors' following that leverage strategy have come a cropper. Even quite a few of the big ones. Google Judith and Fergus Wilson.