should I move morgage over to rental flat?

barbarafloyd

Hi,

We have 2 properties and are planning to rent one out. We have 1 mortgage, currently on the flat we live in. Is there any advantage to me moving the mortgage to the flat we are going to rent out? Does it matter which property has the mortgage? I'm wondering if there is any financial benefit to having the mortgage on the rental property instead (tax benefit maybe?)
thanks!!!

dimbo61

You will need a broker for this if you are getting a BTL mortgage as most are broker only.

amnblog

You cannot 'move' a mortgage Barbara.


You can get a new one on the flat and pay off the one you have.


You can 'port' a product but not from a residential property to a investment property (property let).


You should consult both a mortgage broker and an accountant to decide the best way forward.

barbarafloyd

thanks, but I am still interested in the tax question, i.e are there advantages to having the mortgage on the property I am planning to rent out rather than the one I live in?

lucie_1985

Yes, you'll want the mortgage on the flat you rent out as the interest portion is tax deductible, this is most beneficial if you are a higher rate taxpayer. Obviously you'll need to crunch the numbers though as a BTL rate is going to be higher than a residential one.

amnblog

You can't just move the mortgage to the flat and then assume you can claim tax relief. Consult an accountant.

lucie_1985

Interest incurred on a mortgage for land and buildings upon which rent is received is specifically legislated as relievable for tax purposes within your personal income tax computation....which is why you always want to have the majority of debt within rental properties rather than in your own home.