Famof3's 10 year Challenge

edited 8 February 2019 at 10:52AM in Mortgage-Free Wannabe
22 replies 1.9K views
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Replies

  • Hi Famof3,

    I don't profess to be an expert, but do have 1 BTL and a residential mortgage.
    We were advised by our mortgage advisor / financial advisor - that the priority for overpayment of mortagages should be the residential mortgage, as it is the roof over your head.

    That said, we overpay on the residential mortgage from our salary and savings and make small overpayments on the BTL from any surplus/profit that the rent brings in.

    So in theory, we overpay on both, but the priority is our home over our BTL.

    Not sure if the above advice helps in anyway.

    Best wishes,
    PC
  • Famof3Famof3 Forumite
    18 Posts
    lulabelle1 wrote: »
    Hi, I'd leave all of the B2L mortgages as they are and concentrate on paying down the mortgage on your own property.

    For a few reasons:
    -I'd prefer to have the roof over my head paid for as appose to the roof over my tenants head
    -Despite the tax changes in recent years, it's still a benefit (when calculating self assessment) to offset mortgage interest against your tax bill.


    That's very true - I guess its the biggest mortgage so it feels slightly overwhelming tackling that first. But you are right it is sounds most effective in the current tax system if I take into account the reduction in tax liability. However doesnt the new tax system being implemented change all of that?


    Have I calculated this correctly for the new tax system (assuming its already 2020 when its all phased in).
    From my understanding at that point mortgages cannot be offset by 2020 and you will only get a credit for 20% of the interest only payments....
    If i assume for my maths head sense both mortgages are for 100k and interest only:
    BTL 2 at interest of 3.9% - pay £3.9k per year however get 20% back - £0.78k =£3.12k
    House mortgage at interest at 1.89% - pay £1.89 per year nothing back


    So from that it would be better to pay back the BTL2? I may have got that completely wrong so so do correct me...:(
    Famof3 - Working our 10 year plan :D:D:D
    Aim no. 1 --- Save up £10,000 for house renovation (£6.3k - 8th Feb '18)
  • Famof3Famof3 Forumite
    18 Posts
    Hi Famof3,

    I don't profess to be an expert, but do have 1 BTL and a residential mortgage.
    We were advised by our mortgage advisor / financial advisor - that the priority for overpayment of mortagages should be the residential mortgage, as it is the roof over your head.

    That said, we overpay on the residential mortgage from our salary and savings and make small overpayments on the BTL from any surplus/profit that the rent brings in.

    So in theory, we overpay on both, but the priority is our home over our BTL.

    Not sure if the above advice helps in anyway.

    Best wishes,
    PC


    Thanks PC :o, what do you think of my post above re: new BTL tax rules - is that your understanding too?
    Famof3 - Working our 10 year plan :D:D:D
    Aim no. 1 --- Save up £10,000 for house renovation (£6.3k - 8th Feb '18)
  • Famof3Famof3 Forumite
    18 Posts
    Wooohooo just found £45 in my Quidco account I had forgotten about!! Just managed to transfer £350 into the reno budget yay!! Chip chip chipping away! Looking forward to getting this one out of the way so I can crack on with the mortgage (which mortgage still to be decided!)
    Famof3 - Working our 10 year plan :D:D:D
    Aim no. 1 --- Save up £10,000 for house renovation (£6.3k - 8th Feb '18)
  • Morning everyone,
    So after a very joyful Sat evening celebrating at the work Xmas party, spending a bit too much on babysitting/taxi/alcohol....https://images6.moneysavingexpert.com/images/forum_smilies/speechless-smiley-040.gif I've just found out i'm getting a £100 tax refund wooohooo!!!https://images6.moneysavingexpert.com/images/forum_smilies/cool.gif

    Now just need to wait patiently for it to appear into the bank.... Does anyone else have a bit of an Amazon addiction? I'm thinking it might be worth joining a challenge of not spending any money on there for a couple of months - its pretty addictive....

    Anyway successful start to a monday I managed to make and remember to bring in my sandwiches so no expensive work lunch for me!

    Hope everyone had a fabulous weekend!!!
    Famof3 - Working our 10 year plan :D:D:D
    Aim no. 1 --- Save up £10,000 for house renovation (£6.3k - 8th Feb '18)
  • Oh my smileys didn't work - dont know what I messed up there!! Well just checked my bank account and the tax refund has gone in already. Transferred another £500 into savings so that's £1250 this month - another £750 to go to hit my goal!
    Famof3 - Working our 10 year plan :D:D:D
    Aim no. 1 --- Save up £10,000 for house renovation (£6.3k - 8th Feb '18)
  • Hello,

    Currently manic at work, but when i get a moment, i'll have a look at your understanding of the tax implications and see if it matches my understanding.
  • Thanks PC :) really appreciated. I find everything online a bit confusing. Well another no spend day done, the lunch sandwiches haven't got boring yet, although the petrol light on the car has just gone on.... :(
    Been doing some lovely pie charts of my credit card statements :rotfl: Does anyone else love excel?! :cool:
    Mission this week is to switch all the BTL things into one separate account so I can track it all easily and keep my finances separately. For anyone doing their own tax returns, I did mine last weekend and found it quite straight forward (as long as you have all the numbers) - they have some great youtube videos telling you how to fill in sections etc. :money:
    Famof3 - Working our 10 year plan :D:D:D
    Aim no. 1 --- Save up £10,000 for house renovation (£6.3k - 8th Feb '18)
  • So car is filled up :-( that £60 gone, but I only really use it for my 15 mins commute to work and dropping the little one at nursery so hopefully that will last the rest of the month.
    Another day of bring your lunch to work today - very little counts!!
    Building work on the house is going well, digging has stopped and blocks are starting to be built up were the walls will be. Feels fantastic to walk in our future kitchen and really understand the size etc. Luckily the rest of the house is closed up so no dust coming into the house yet - that's when the fun will really start!! Ekkkk
    Pinterest is starting to get filled with bathroom ideas and the kitchen is almost decided on. I can't wait for this all to take shape!
    Famof3 - Working our 10 year plan :D:D:D
    Aim no. 1 --- Save up £10,000 for house renovation (£6.3k - 8th Feb '18)
  • Right sorry I’ve been off - nasty tummy bug going around :0(. But the good news is that has meant we have spent little to no money!! Also managed to finish our Christmas shopping under budget and happy with all our purchases.
    £250 more transferred across to the savings so now just to survive the rest of Christmas on budget and we should be home dry for this month!!
    Famof3 - Working our 10 year plan :D:D:D
    Aim no. 1 --- Save up £10,000 for house renovation (£6.3k - 8th Feb '18)
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