Mortgage over payments

markharriers

Good evening,

I'm currently on a 2% fixed buy to let mortgage with a property i LET out which is coming to the end of its fix period and would like a longer fix this time which would tie the money up, I'm currently overpaying the mortgage by £200 a month assuming I get another 2% fixed mortgage (for math purposes) could someone tell me what i actually gain each month in money other than the £200 coming off the mortgage? the reason being is I'm debating putting the overpayment money (£200) into my account each month and save it encase I ever want to invest it into something else.

Edi81

Means nothing without outstanding term and balance and LTV. 

2% on a BTL is a bit optimistic at the moment. 

markharriers

I have checked on calculators for example I put 28 years left but it always presumes il have the same mortgage for that long! I'm looking for a 5 years plan! I owe £80,000

simon_or

markharriers said:

Good evening,

I'm currently on a 2% fixed buy to let mortgage with a property i LET out which is coming to the end of its fix period and would like a longer fix this time which would tie the money up, I'm currently overpaying the mortgage by £200 a month assuming I get another 2% fixed mortgage (for math purposes) could someone tell me what i actually gain each month in money other than the £200 coming off the mortgage? the reason being is I'm debating putting the overpayment money (£200) into my account each month and save it encase I ever want to invest it into something else.

If you overpay by £200 on a mortgage that's on a 2% interest rate, you save £4 in interest a year (2% of £200).

You could always look at releasing cash by taking out a further advance if you want to invest funds elsewhere.

markharriers

simon_or said:

markharriers said:

Good evening,

I'm currently on a 2% fixed buy to let mortgage with a property i LET out which is coming to the end of its fix period and would like a longer fix this time which would tie the money up, I'm currently overpaying the mortgage by £200 a month assuming I get another 2% fixed mortgage (for math purposes) could someone tell me what i actually gain each month in money other than the £200 coming off the mortgage? the reason being is I'm debating putting the overpayment money (£200) into my account each month and save it encase I ever want to invest it into something else.

If you overpay by £200 on a mortgage that's on a 2% interest rate, you save £4 in interest a year (2% of £200).

You could always look at releasing cash by taking out a further advance if you want to invest funds elsewhere.

Thank you I presume you mean £4 a month? I like the idea of overpaying but my plan this time is a 5 year fix so I'm thinking the money that goes in will have to stay in there for at least that amount of time, but before then I may look at buy another rental property so just seeing if the saving I gain from overpaying is that great not to have the money sat in my bank at my disposal.

Thrugelmir

Overpaying your BTL mortgage is likely to increase your taxable profit. 

markharriers

Thrugelmir said:

Overpaying your BTL mortgage is likely to increase your taxable profit. 

Good morning,

How?