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BTL Interest Only - Recommended LTV
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Cintrapark
Posts: 92 Forumite
Just wanted to get everyone's opinion on buy to let interest only mortgages. I have a second property that has a high interest only mortgage, however the LTV is 59%. The property is in Crystal Palace, London. Any thoughts on whether or not this is too high a risk?
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Comments
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Not sure what your question is?
Interest only is a standard option for buy to let mortgages.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 -
Well you can still have a repayment option with a BTL mortgage....0
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Sorry, what is the question?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 -
The question is whether or not a LTV of 59% is a recommended percentage in terms of risk bearing in mind that by having a interest only mortgage you're not actually paying off the capital.0
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Interest only is a tax efficient strategy on BTL.
You could always set aside money each month if you wanted to reduce the capital borrowed.
You need to look at the yield.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
it depends what your objective is?
Investors with multiple buy to lets will tend to have them all interest only.
If you don't like having the debt you may prefer to pay the capital off.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 -
One alarm bell op, why "high interest"?
With that LTV you should be paying well under 5% interest only on a base rate tracker, mayber even under 4%.
Or by "high" did you mean a large mortgage?0 -
Sorry if I wasn't clear. I actually meant high mortgage (223,000). The interest rate is currently 3.99% - I"m restricted in choice as I'm an expat. I've bought a property abroad and didn't want to lose my footing in the London housing market, hence why i've kept the property on. I just want to know if I'm not exposing myself to a potentially 'risky' situation.0
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What risk?
It is not renting for over £1K a month washing its face easily?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 -
yes i receive around 1,200 a month's rent.0
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