Mortgage Advice - Buy to Let

faer123

Hello Friends,

I have a house, value around 90K. (Original Purchase 106k)

I moved to Australia 5 years ago and rented my house out to a friend and now im back in the UK and do not want to live there again. This means I need to get a proper buy to let mortgage and get myself sorted financially.

My mortgage value is now: 70K
I have 20K in savings (Returned Pension from Australia)

I'm struggling on what type of buy to let mortgage to get...

Using the rule that rent should be 125% of repayments i have come up with these options based on my rental income being 450 per month.

1. Buy to Let on 70K (Over 25 Years) (368 Initial Repayment)
2. Buy to Let on 50K (Over 13 Years) (367 Initial Repayment)

I am waiting for the housing market to get better so i can sell my house when the value is back up too the original 105K but obviously i cant say how long this will take.

I'm wondering whether its better to tie up my 20K of savings into my house, or whether to put it into an ISA for a few years while im waiting for property prices to increase. At least then ill have the option to take the money and use it for something else i.e. if i decide to leave england again before selling the house, ill have some money for a deposit on a house in Australia.

I have also been reading up on buy to let, offset mortgages. Could this be worth it in this case?

Any help will be greatly appreciated!
Thanks!
Fae

ACG

You have the calculation wrong...
It varies from lender to lender but typically it is 125% based on an interest rate of 6% on interest only. That should fit with the majority of BTL lenders - if it doesnt then its not a great investment.