Parents paying over 4%...

[Deleted User]

There will also be a CGT liability when the rental property is sold even if it's sold with a discount to the OP.

[Deleted User]

societys_child said:

"I refuse to prop them up if they're allowing themselves to be ripped off negligently"

That’s the spirit . .

. . and you think it will help them out by buying one of their properties at a discount?

It is rather contradictory isn't it.  I also liked the "I want to refrain from letting them sell," even though that would appear to be the most sensible option.

RelievedSheff

Your parents have potentially got a couple of issues cropping up there.

What have they got in place to pay off the mortgage on the interest only property when that is up in a few years? As it stands if they have nothing in place to pay of the mortgage balance then they will have to sell that property to pay back the mortgage company.

And they also need to look at the tax implications of the second property.

csgohan4

I assume your parents were of sound mind when they bought the house and were paying the interest rates happily as well? It's like insurance where people don't look around on renewal, no one else but them selves to be responsible

As above deprivation of assets will come into play if you buy at a discount. 

however this may be the tip of the financial iceberg, are they on competitive phone, broadband, utilities suppliers e.t.c?

I did a financial MOT for my parents a few years back and found they were paying huge amounts because they never shopped around and always renewed, I now manage these for them with their consent. Something to look at as well

Flatulentoldgoat

Had a conversation today with them, they seem adamant that because they're over 70 and retired they won't get any mortgages at all. Surely that's not the case? Any recommendations on brokers. As per the other suggestions, I really want them to be able to maintain property A with it's interest only mortgage so they can continue to let it to cover their costs so they can live in property B and not be crippled. B is the property they're paying over 4% on...

dunstonh

Had a conversation today with them, they seem adamant that because they're over 70 and retired they won't get any mortgages at all

They are wrong.  BTL mortgages are available to them.  Residential mortgages are where you have age limitations (but not quite as black and white as age alone)

Any recommendations on brokers.

Pretty much all localised experienced brokers (not estate agent chain based).  Probably best to avoid internet ones as local face to face (when that returns) may suit them better.

csgohan4

Flatulentoldgoat said:

Had a conversation today with them, they seem adamant that because they're over 70 and retired they won't get any mortgages at all. Surely that's not the case? Any recommendations on brokers. As per the other suggestions, I really want them to be able to maintain property A with it's interest only mortgage so they can continue to let it to cover their costs so they can live in property B and not be crippled. B is the property they're paying over 4% on...

new mortgages are based on affordability now with the regulations in place for some time.

so as a general rule of thumb they can borrow x4.5 their gross income. If they don't have enough income to pay for a repayment mortgage, no lender will take on the risk

Another ticking time bomb is the I/O mortgage, what are they going to do once the mortgage is due for full payment? Is selling it an option?