Professional Advice needed Over pay or BTL

BBQ-king

Hi any idea where to go for professional financial advice around Cambridge?

Mortgage brokers or financial planners I've seen in the past just seem to be sales people with no real care for helping you improve your situation. Bank managers don't seem to be allowed to give this sort of advice and unless you've got £m's you can't speak to a wealth manager.

My question for them is: should we over pay our mortgage or buy another house (or houses and let them). From doing a few affordability checks the banks will lend us up to £550k and our current mortgage is only £150k on a £300k property. We've looked into moving but just cannot find anywhere we like (been looking for 6 months). We're both 26 and child free - so no kids, and we're 100% debt free. In the absence of buying somewhere more expensive should we use our spare cash just to over pay our current house or release some equity and start some BTL's? It seems simple to me that if you can borrow money for 3% and make nett 4% yield (excluding appreciation) you can't do anything but make money. I know there's a lot of agro involved in being a landlord. the reason I want advise us because if it's that simple why doesn't everyone do it? What am I missing? Is it the right thing to do? I'm hoping a professional will be able to give me some proper advice.

Sorry to go on and thanks in advance for your help.

nubbins

BTL all the way for me. Why doesnt everyone do it? For a start you need at least 25% equity in every BTL, it can be hassle, theres always a chance of a property crash etc etc etc. The way I see it, I look back at property prices 15 -20 years ago compared to what they are now, will they grow like that again, I think so, will the mortgages on my properties be a fraction of the valuation in 15 years time, I think so, in 15 years time will I have a lot more options than someone who is mortgage free for the next 15 years, hopefully, are the properties in an area of high demand and will continue to be, hopefully. Its not simple and easy, things can go drastically wrong, I could be dead tomorrow or be hit with a terrible illness and remember interest rates will not stay like this but in the long run I hope it will be worth it.

Old_Git

what happens if your tenant wont pay .Can you keep up the repayments .

nirajn123

I am exactly going through this dilemma as OP, I've got some savings which aren't returning anything - and I don't see that changing in the short term. My mortgage is also coming up for renewal which presents an opportunity to release significant sum or go for a lower rate.

After much thought and the fact that prices have run up, I have decided that I'll start looking around right properties with decent rental yields and only and only if I can find them I'll buy by pulling out some equity.