Sell BTL to pasy down mortgage

Hi everyone,

my wife and I are now serious about trying to become debt/mortgage free as soon as possible.
We have a £215k mortgage on the house we live in.
£75k equity in a flat I own which I rent out. (£39k left on mortgage - approx 7 years to clear on current rate)
Credit card and car loans come to about £15k.
We have about £12k in savings, including emergency cash.

My question is should i sell my rental property now and use that money to clear the credit card/loan and also chuck whats left at the big mortgage?

Or do i pay off CC/loans with savings and wages?

or as above and keep flat,pay it off first then use rental money to pay extra on big mortgage?

any advise would be really appreciated.

thanks

Replies

  • MallyGirlMallyGirl Forumite, Board Guide
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    would depend on what return you are getting on the rental, vs what interest (if any) you are paying on the CCs and loans.

    no one could give you sensible advice with the amount of detail you have provided I am afraid - too many variables
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  • CKhalvashiCKhalvashi Forumite
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    I'd throw the £12k saved onto the credit cards, knowing that you could re-borrow on them in an emergency situation.

    Unless they're at 0% that is.

    You need to look at return on the BTL to see whether it's worth it.
    "I kada sanjamo san, nek bude hiljadu raznih boja" (L. Stamenkovic)

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  • silvercarsilvercar Forumite, Board Guide
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    If your crystal ball tells you the flat will go up in value, you are better off holding on to it and sell it when it will take a greater chunk out of your mortgage.
    Usually found at a vaccine centre 💉
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  • lulabelle1lulabelle1 Forumite
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    I guess it depends on whether you see the B2L as being an investment for the future.

    If you sell it and clear CC and Loans, is there a chance that you might get spendy again and run up debts on CC? Do you need to downsize the mortgage on your own home to make it manageable or are you just liking the idea of aiming to be mortgage free sooner than later?

    My own opinion is that my B2L would be the last thing for me to sell as ideally I'd like to get the mortgage paid off in time for retirement and use the income from it to supplement my pension etc.
  • LadyGnomeLadyGnome Forumite
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    Step one for me would be to look at your current outgoings and check if you are living within your means. You have racked up CC and other debt, is this historic or is this a sign that you are overspending.


    Like lulabelle we see our BTL as part of our retirement portfolio so would be reluctant to sell, without exploring all other options first.
    Mortgage
    Start Nov 2012 £310,000
    Aug 2021 £174,115.10
    Reduction £135,884.90

    End Sept 2034 (but I have a cunning plan...)
  • MoneyfordreamsMoneyfordreams Forumite
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    Selling costs and capital gains tax?

    may be cost effective to keep it
    Mortgage restart June 2018 £119950
    Re mortgage August 19 £110470, HSBC 0, Hfx £5800, MBNA £6000
    … Mortgage £96500
  • Personally for me I would crunch the numbers based on yield on BTL vs interest on debts and go based on the maths. Same for savings. What are all the interest rates?

    I'd echo comments above about debt tho, where is it coming from and can you eliminate it via a Rebudget? Are all your bills on cheapest deals etc?
    :)
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