3 mortgages - release equity to pay off one in full. good idea?

airchie

Hi folks,

Was just sitting speaking to the OH and she has just realised her flat (lets call it flat1) is likely to have increased in value by almost £90k in just over a year.

She (or her parents) have another flat (lets call it flat2) bought a long time ago with only £50k approx left on the mortgage.

I had it in my head that using that equity on flat1 to pay off flat2 in full and use the rental income from flat2 to help make over-payments on the mortgage on flat1 would make more sense than paying both concurrently.

I'm sure I was told that in the first three-quarters of a mortgage's term, the vast majority of your payments are paying interest only.
So if one was paid off in full, you'd pay more interest on the other mortgage in the short term but with the income from the rental in the paid-off flat, you could over-pay substantially and reduce the capital much more quickly than normal.

Is there any logic to what I'm saying?

Thanks in advance.

airchie

Anyone got any idea if it's a sensible suggestion?

Anyone got any suggestions on how I could work out for myself if its sensible?

Thanks in advance.

airchie

How can I bring this post to Martin's attention?
I'd be curious to hear his opinion on this kinda thing.

airchie

Does anyone know how to ask Martin this question directly?

Surely he'd know the answer, or at least tell me how to find out for myself?

toppercleary

I have a similar query. On a second property we currently have a buy-to-let mortgage. I was wondering if it would be sensible to move this outstanding £50k mortgage and include it in the mortgage of our famnily house at a cheaper rate.

airchie

Is there any way to raise this question to Martin directly?

Elsa06

My husband retired in April. We have 2 properties which are rented out and 1 primary home. We have a mortgage for 1 of the rental properties. What I'd like to know is: would it be worth paying off the mortgage of £25,000 or continue with it for the remaining 4 years and keep the savings in a high interest account. I thought that he would get tax relief on the outgoing mortgage payment which I thought would be offset against the rental income (which is less than the mortgage payment). HELP!!!!!:( (incidentally, I work)