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Pay off mortgage or buy to let
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Yaz_2016
Posts: 24 Forumite
Hi guys, hope your all well. I have been slipping with my MF journey since my last overpayment in January. I have been in two minds for the past couple of months if i should remortgage to release £100k to buy a house to let. This would make my current mortgage debt from £200k to £300k. The buy to let would pay for itself and i would do this as a repayment so it pays itself off say in the next 20-30 yrs. I would really like to get your views on this as its a big decision and not sure what option is the best. If i carry on with my MFW journey, i would be mortgage free in 8 years (im now 33). I really dont know what to do!! Any advice please :-)
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Comments
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A couple of things to think about:-
Would you pass the affordability criteria for £300K
Have you allowed for the extra 3% Stamp duty?
Have you looked at the tax changes on BTL and will they impact your calculations?MortgageStart Nov 2012 £310,000
Oct 2022 £143,277.74
Reduction £166,722.26
OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
2022 MFW #78 £10200/£12000
MFiT-6 #28 £21,772 /£750000 -
Yes the above all seems to be ok. The only thing im fearing is i buy the buy to let and a crash happens which i guess is unlikely! Also like the idea of being mortgage free in 8 years. Its so hard.0
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Im in London so rental income is good but house prices are high0
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We have a BTL in London but we bought it a long time ago so the yield is reasonable as there is no mortgage. It is difficult to find good value properties in London now and the rules for BTL mortgages are tighter than they used to be. If you are going to do it be prepared for it to be running at close to break even after the new tax regime kicks in and see it as a longer term investment rather than an imminent source of profits.MortgageStart Nov 2012 £310,000
Oct 2022 £143,277.74
Reduction £166,722.26
OriginalEnd Sept 2034 / Current official end Apr 2032 (but I have a cunning plan...)
2022 MFW #78 £10200/£12000
MFiT-6 #28 £21,772 /£750000 -
Hello Yaz. I really don't have a definitive answer for you. I would say, go with your gut instinct. You will feel better for it.
I made the same decision in 2014 and have just come back on here, seeking to be mortgage free. For me, I know it was a good thing to do, but I didn't have the challenges facing those wishing to be a landlord now.
Positive vibes to you and best wishes with your decision.
TxStill striving to be mortgage free before I get to a point I can't enjoy it.
Owed at the end of -
02/19 - £78,400. 04/19 - £85,000. 05/19 - £83,300. 06/19 - £78,900.
07/19 - £77,500. 08/19 - £76,000.0
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