What type of mortgage?

Francophile

I'm afraid we're not very knowledgeable about mortgages. We paid off our mortgage early this year ( and managed to get the exit fee back :j ). We have decided we would like to buy a small property now for our retirement in about 5 years time at which point we would sell our current home and pay off the mortgage. The area we propose to buy in is a tourist area in the south of Ireland (we live in the North). We intend to use it initially for weekends and summer breaks but there is a possibilty that we could let it out to holidaymakers. So what is the best type of mortgage? We've heard of buy to let but is that more costly than a normal mortgage considering we might never let it out. Also is fixed or tracker best?
Any advice would be really appreciated.
Many thanks in advance.

dunstonh

We've heard of buy to let but is that more costly than a normal mortgage considering we might never let it out.

It wouldnt be a buy to let mortgage as you are not letting the property. These also require the rental income to be higher than the mortgage so as you are unsure about letting it out, that wouldnt be an option.

You could raise a mortgage on your current home, in which case you get the standard residential mortgage options. Or you could look at lenders that lend on second or holiday homes.

Also is fixed or tracker best?

I will tell you in five years. There is no way to know which is best financially as only time will tell. However, a five year fix guarantees your payments whereas a tracker doesnt.

Francophile

Thanks for that Dunstonh. It looks like a 5 year fixed rate might be the job.

Francophile

I should stop reading on this site. I've now seen interest only mortgages. Would that be better for us as we would plan to pay off the mortgage when we sell our main residence.