Buy to let and rent

Thrugelmir

Does the business plan work on a repayment basis? After making allowance for all costs and tax. You'd need a high starting yield to achieve this goal.

chrishar

The rent would cover the repayment. Don't know a lot about stocks and shares.
What would I get for 140k in risk free savings?
How can I compare savings vs property?

jamei305

chrishar wrote: »

How can I compare savings vs property?

Look at the money you put in and the money you get out.

chrishar

£60000 equity invested
£130000 borrowed £270 interest only or £590 repayment
£9000 rent a year
Short lease (63 years) to extend would cost over £20k

agrinnall

booksurr wrote: »

so what? OP is looking for an income therefore the less he is paying in interest the more income he will have

people should remember that a tax tail of 20% should not wag the dog if the objective is to maximise 80% income now, not later

Am I missing something? Whether the OP has a repayment or an interest only mortgage if the term and interest rate is the same for both then the monthly repayments will be the same, so the income before tax will be the same. After tax the income will be higher for the interest only mortgage.

agrinnall

brit1234 wrote: »

agrinnall can you tell me what repayment vehicle you have got for your interest only mortgages?

I don't have a mortgage of any sort so your question is irrelevant.

david_a

agrinnall wrote: »

Am I missing something? Whether the OP has a repayment or an interest only mortgage if the term and interest rate is the same for both then the monthly repayments will be the same, so the income before tax will be the same. After tax the income will be higher for the interest only mortgage.

Seriously????

Kynthia

agrinnall wrote: »

Am I missing something? Whether the OP has a repayment or an interest only mortgage if the term and interest rate is the same for both then the monthly repayments will be the same, so the income before tax will be the same. After tax the income will be higher for the interest only mortgage.

I would have thought that the interest element would be the same each month but the repayment mortgage would also have monthly repayments of the capital. However as the capital element is ignored for tax it will make no difference either way to the taxable profit the OP makes.