Landlords - what type(s) of mortgages you have and why?

silvercar

uncreative wrote: »

Which is why i do it through a limited company so that the income is taxed at 20% and not 40%/60%.

But then the profits (and any capital growth when you eventually sell the property) are stuck in the company and you have to plan how and when you are going to get the money out.

Not knocking it, as it can work, but not totally straightforward.

MsWow

regprentice wrote: »

Whats the letting market like where you are.

If you have a repayment mortgage you are likely to be charging a higher rent than landlords with an io mortgage.(or have less 'margin' for error built into your income) As is said previously the is the preferred mortgage type for 'professional' landlords.

You will also be up against 'accidental' landlords who can undercut you (i know of couples who had two properties and now live together and rent one out...i also know people who have inherited a 'granny' flat from a deceased relative). For these people just having cash coming in can be enough.

You need to be clear how your numbers stack up against the market as well as simply getting your numbers to add up in the first place.

We are as well accidental landlords but we have a mortgage on the house. We live in the South of England and the rent market is really good at the moment. We are renting the house out for £1200 per month and the new 5 years fix mortgage would be £800 and we would also release £60k out of the property.

Old_Git

I remortgaged my residential house to buy a rental property .
I found it was the cheapest way to get a loan .
When the interest rates fell I was paying 0.68% .
I decided to overpay the mortgage ,yes I had a bit more tax to pay but I was paying very little in tax anyway .
In 2013 I moved house and wanted to move the mortgage with me .
Woolwich wanted an extra £300 per month ,they also wouldnt let me move it to a BTL mortgage as I didnt own enough and they refused consent to let .I rented without consent and overpaid as quickly as I could .In December 2014 I took out a loan for the last £7500 at 3.9%.
In February 2015 I received a small inheritance enough to clear the loan .So no more debts and two rents coming in .

MisterB1959

MsWow wrote: »

MisterB1959 I hate you . Thank you as well for your comment. Are you planning to sell the properties once you've reach the loan term so you can repay the lenders?

when the mortgage term ends, we will look to sell them (pref to our children, who can take them over as btl's themselves) if we cant get another btl mortgage, but who knows what the market will be in 12 years time, when i reach state pension age. as I am already enjoying my fire service pension, we are planning that we wont need additional income at our current levels when we reach that age, so if we cant secure further btl borrowing we will sell.


at the moment we're both enjoying retirement in our early fifties - as I said, we will NEVER be cash rich, but our quality of life at our age is worth much more than the 'holy grail' of a cash rich state age retirement in 12 years time !