Buy to let deposit?

Whitt85

I'm about to come into 50k.

My husband and I have a £313k mortgage on our £700k house. We are fine financially so don't need to reduce monthly payments etc.

We are deciding how best to spend the 50k. We are thinking about a buy to let property. Is this worthwhile these days what with all the stamp duty additional costs etc etc?? What percentage deposit would we need to get a B2L mortgage?

Whitt85

Or would we be better placed to pay it off our current mortgage?

kingstreet

Min 25% deposit as long as the potential rental income is 145% of the monthly mortgage interest assuming a rate of 5.5%.

How much do you want to be a landlord against the backdrop you have described?

Paying it off mortgage v buying an asset? No way to answer without significantly more information. Discuss with independent broker to build a bigger picture.

Lilla_D

I agree with Kingstreet that it's not a simple question of buying apples or pears. Ultimately it's down to your individual preference including risk taking, time for dealing with buying and managing a property, dealing with the tax/accounting side of things, even if you employ a letting agent and let them run wild with any AST they propose and use their suggested maintenance people and get an accountant to do your tax returns, etc. BTL is a longer term investment strategy, so consider what your plans are.

Yes, there are lenders who can accept less than 25% deposit and/or calculate with a more lenient stress test, but without knowing your background and the property you're looking to buy, the above is the safest guideline one can give on this forum. If you speak to a broker, they'll be able to discuss it with you further.

wavelets

Do you want to set up a business as a landlord?
Do you have the time to manage the business, all the risks, liabilities and potential rewards associated with running a business?

If not, why don't you invest it and let others do all the work?