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Should we get a BTL mortgage?
penguine
Posts: 1,101 Forumite
We have a rental property (a leasehold flat) which we own outright. It's worth approximately £200k and the rental income is £850 per month. We plan to sell it in about 3-5 years but in the meantime we need to come up with £25,000 to pay towards repairs to the building.
We also have a residential mortgage on our own home. The balance remaining is £193k at 2.79% interest.
We're wondering if we should take out a BTL mortgage on the rental property because the interest would then be a tax deductible business expense. If we borrowed 60% of the value of the flat (£120k) we could spend £25k on the repairs and put the remaining £95k towards our residential mortgage.
But would it be worth our while doing this, given that we're only planning to own the rental property another 5 years at the most?
We also have a residential mortgage on our own home. The balance remaining is £193k at 2.79% interest.
We're wondering if we should take out a BTL mortgage on the rental property because the interest would then be a tax deductible business expense. If we borrowed 60% of the value of the flat (£120k) we could spend £25k on the repairs and put the remaining £95k towards our residential mortgage.
But would it be worth our while doing this, given that we're only planning to own the rental property another 5 years at the most?
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Comments
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We have a rental property (a leasehold flat) which we own outright. It's worth approximately £200k and the rental income is £850 per month. We plan to sell it in about 3-5 years but in the meantime we need to come up with £25,000 to pay towards repairs to the building.
We also have a residential mortgage on our own home. The balance remaining is £193k at 2.79% interest.
We're wondering if we should take out a BTL mortgage on the rental property because the interest would then be a tax deductible business expense. If we borrowed 60% of the value of the flat (£120k) we could spend £25k on the repairs and put the remaining £95k towards our residential mortgage.
But would it be worth our while doing this, given that we're only planning to own the rental property another 5 years at the most?
You want to borrow at a higher rate (most likely) to pay off debt at a lower rate?0 -
Speak to an accountant. If you are paying tax on the full £850 a month you are shooting yourself in the foot.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, 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.0
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