Buy-to-let or Clear off mortgage main home

sonub4ualt

Hi,
I have an existing mortgage on my property and will switch to a new product/lender for better rates as my fixed rate is nearing to end and lenders SVR applies in Oct'30. Iam   very new to the real estate market and would like to choose my options correctly. 
Income: Circa 55k
partner's: 12k
kids:3
Existing mortgage balance £145000 at LTV of 75% with equity of 50k.

1. Is it worth borrowing more and investing in buy-to-let property.
2. What are the rates for BTL and costs if i want to buy a flat for 100k with 25k deposit borrowing more from my current mortgage lender.
3. Would it be better if i clear my existing mortgage and then invest in real estate. 
4. Planning for a bigger house in near future 4-bed, as current property 3-bed.

Suggestions and guidance welcome.
thanks 
sonu

[Deleted User]

sonub4ualt said:

Hi,
I have an existing mortgage on my property and will switch to a new product/lender for better rates as my fixed rate is nearing to end and lenders SVR applies in Oct'30. Iam   very new to the real estate market and would like to choose my options correctly. 
Income: Circa 55k
partner's: 12k
kids:3
Existing mortgage balance £145000 at LTV of 75% with equity of 50k.

1. Is it worth borrowing more and investing in buy-to-let property.
2. What are the rates for BTL and costs if i want to buy a flat for 100k with 25k deposit borrowing more from my current mortgage lender.
3. Would it be better if i clear my existing mortgage and then invest in real estate. 
4. Planning for a bigger house in near future 4-bed, as current property 3-bed.

Suggestions and guidance welcome.
thanks 
sonu

1. Absolutely no idea based on the scant information provided,
2. Again, no idea what rates your current lender offers for BTL mortgages as we have no idea which lender your current mortgage is with.  You're already at 75% LTV so I think you will find it difficult to borrow £25k by increasing the mortgage on your home.  What about solicitors, surveys, SDLT, getting the property ready for letting, where is the money to pay for those coming from?
3. Quite possibly neither as a higher rate income tax payer.

You're not the first and you won't be the last landlord wannabe poster to ask these kinds of questions on the forum.  If you think BTL is something you want to invest in then you need to do a lot more research and number crunching. 

sonub4ualt

Thanks Lover_of_Lycra,

FYI, I am currently with Nationwide. Will need to do a lot of research and analysis. I was hoping that the market would be quiet in the foreseeable future for the next 1-2 years and lenders might attract investors by lowering the rates, so might be a good opportunity to invest. Else, will save a bit more in the coming months for BTL option.

Rgds,
sonu

[Deleted User]

sonub4ualt said:

Thanks Lover_of_Lycra,

FYI, I am currently with Nationwide. Will need to do a lot of research and analysis. I was hoping that the market would be quiet in the foreseeable future for the next 1-2 years and lenders might attract investors by lowering the rates, so might be a good opportunity to invest. Else, will save a bit more in the coming months for BTL option.

Rgds,
sonu

Nationwide don't offer BTL mortgages.

Slithery

Which country do you live in? Just checking as 'real estate' is an American term...

greatcrested

This might give a hint as to what's involved aside from the financial calculations

** This thread is intended to provide information to both landlords and tenants relating to Assured Shorthold Tenancies (ASTs) in England and Wales.

Updated April 2020 to include the Coronavirus Act 2020 and July 2020 to include the Electrical Safety Standards Regulations 2020.

Topics covered:

Post 2: Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015) plus the Homes (Fitness for Human Habitation) Act 2018

Post 3: Deposits: Payment, Protection and Return.

Post 4: Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

Post 5: Rent increases: when & how can rent be increased?

Post 6: Repossession: what if a LL's mortgage lender repossesses the property?

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information

Post 9: Letting agents: how should a landlord select or sack?