Paying off an interest only buy to let mortgage

bluelycra

I am new to this board and am also a newbie property investor. We bought our first BTL property a few months back by taking out an interest only mortgage. Our mortgage advisor told us that many in this business never paid off those mortgages and passed on the property down to their heirs.

Is this a thing? Are there pros and cons to paying off an interest only BTL mortgage?

Thrugelmir

What are your objectives and plans for the future?

kingstreet

bluelycra wrote: »

Our mortgage advisor told us that many in this business never paid off those mortgages and passed on the property down to their heirs.

Is this a thing? Are there pros and cons to paying off an interest only BTL mortgage?

Garbage. At some point, the mortgage has to be repaid.

At the end of the term, it has to be repaid, if not refinanced elsewhere.

If you die, your estate has to repay the mortgage. It may well be that your beneficiaries raise a mortgage to purchase the property from the estate.

The only way the mortgage 'disappears' is if the BTL landlord takes life cover to repay the mortgage.

Most don't.

enthusiasticsaver

I would have thought the biggest con is that if interest rates rise the mortgage payment will go up considerably. At least if the capital is being repaid the balance is going down.

As Kingstreet says if you don't take out life cover to repay the mortgage then the estate will need to repay the mortgage or the property will have to be sold.

Your mortgage advisor is talking rubbish. If the property is mortgaged it is not yours to pass on to your heirs.