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buy to let repayment mortgage, change to interest only?
imagine007
Posts: 3 Newbie
Good morning all,
I am new to this and just wanted your expert opinions please.
i have a btl repayment mortgage with mortgage express on a tracker rate currently 2.99% ad hasn't moved for circa 5 years or so paying £497 per month.
Total outstanding £70 k, property currently worth circa 125k, 15 years to run. rent is £550 per month before any management fees, income is actually £477.
I am considering remortgaging to an interest only mainly for tax purposes, i am aware that as the mortgage decreases the the interest only relief will disappear. There is good equity in the property and lookin around i can reduce my payment down to circa £130.
I can retire from the police in 6 years and will expect a lump sum of some £125 k.
Am i wiser to change to interest only and use some of the spare money to bolster monthly income bearing in mind i will have the means to pay off the balance without any problem.
thank you
I am new to this and just wanted your expert opinions please.
i have a btl repayment mortgage with mortgage express on a tracker rate currently 2.99% ad hasn't moved for circa 5 years or so paying £497 per month.
Total outstanding £70 k, property currently worth circa 125k, 15 years to run. rent is £550 per month before any management fees, income is actually £477.
I am considering remortgaging to an interest only mainly for tax purposes, i am aware that as the mortgage decreases the the interest only relief will disappear. There is good equity in the property and lookin around i can reduce my payment down to circa £130.
I can retire from the police in 6 years and will expect a lump sum of some £125 k.
Am i wiser to change to interest only and use some of the spare money to bolster monthly income bearing in mind i will have the means to pay off the balance without any problem.
thank you
0
Comments
-
For a BTL your rate is currently very good.
Do you need the money that would be freed up should you change to an interest-only product?
The tax shield impact of repayment vs interest-only will be minimal for the next few years and is of most benefit whilst you are a higher rate tax payer - will you be after you retire?0 -
As this mortgage is with an organisation tasked with returning money to the taxpayer, moving you to interest-only is going to slow that so it may not be permitted.
With gross rent of £550 and a loan to value of 56%, a remortgage to a new lender will be your best bet, subject to criteria etc.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 -
thanks for your replies, I am not able to remortgage with my current lender as they have closed their books so would be looking elsewhere, seem to be some good deals howver i am aware that my rate at 2.99% is a stonking rate!
I am not desperate for the extra income , however it would be useful both kids at uni and having to fund accomodation costs , circa 10 k a year for the 2 of them, I would put some away in a savings account . My thoughts are taking the repayment mortgage were to whittle the balance down etc. I am not a standard 40% tax payer however can occasionaly encroach over the threshold0
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