Using BTL to pay of mortgage ?

onelifeliveit

Hi, I could really do with some sensible advise. I have been left 120K. The person who left it to me was a real entrepreneur and would want me to do something clever with the money. From my research it would seem the sensible thing to do would be to pay off the mortgage debt......but I am wondering if there is some way I can use this money to generate an income and thereby pay of my mortgage early with extra monthly payments. The onlyway I have found of doing this is by buying two properties on an interest only mortgage and renting them out. My question please : do you think this is the best way to use this money to create an income and pay of my mortgage early and if so will BTL still generate income in 2019 with all the extra tax penalties. Thank you.

Tropically

Becoming a landlord is not passive income so it depends on how much effort you would like to put in. Plus, it is entirely dependent on your local rental market and your current mortgage rate. Only you can do the math to decide whether you are willing to do it. Whether it will make money is highly dependent on how you buy, where you buy and how you manage. It is becoming less of a cash cow not because of tax 'penalties' as you say, but because of the removal of tax relief. It's not a penalty, it's the removal of a previous benefit. Run your numbers, decide whether it is worth it to you.

Paying off your mortgage is safe and has little risk, but is not likely to generate the return of other investments (except peace of mind and freedom!) It is very unlikely to cause you distress.