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Best BTL deals?
hedger
Posts: 313 Forumite
I am gonna re-mortgage my own home to finance buying a new house. I have got a great deal (from £375K to £300K) for the new house so need to raise capital (£120K) from my existing house (which is proving difficult to sell atm but will rent no problem for about £600/mth). My current house is worth about £230K
As you all will know the BTL deals at the minute are very poor with huge fees and early redemption penalties which I dont want as I hope to sell within 2 years IF the market stabilizes.
My broker has advised the following deal:
N.Rock at 1.89% above base rate, no early penalties, 1.5% (£1800) fee. £689 per month.
does this look ok?
As you all will know the BTL deals at the minute are very poor with huge fees and early redemption penalties which I dont want as I hope to sell within 2 years IF the market stabilizes.
My broker has advised the following deal:
N.Rock at 1.89% above base rate, no early penalties, 1.5% (£1800) fee. £689 per month.
does this look ok?
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Comments
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Is there a mortgage currently on the property or is the £120k the total that you will be borrowing against it?0
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I thought the N Rock deal meant the rent had to fully cover the mortgage payment.0
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Would your income support both mortgages?I am a Mortgage AdviserYou should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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£600 per month on a 230k property is a gross yield of just over 3%. Do this and you will be subsidising your tenants.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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The mortgage interest on £121,800 (loan amount + fees) is £699.34 per month. Factor in voids and expenses and the numbers are pants.
If the property is not selling at £230K it is NOT worth £230K. Sell for half of that and you should be able to make £600 per month from the proceeds. Or wait until the market recovers (you may need a good book).
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
Yeah the numbers arent great tbh but the new house is a snip imo at £300K. My existing 120K mortgage will move across to my new house and I hope to raise an additional 120K BTL mortgage against my current house. I have substantial savings/investments so along with renting the BTL property I believe both mortgages are servicable until I sell the BTL property in 1 or 2 years. I cant see the logic in selling my current house now at a real knockdown price when I dont really need to.0
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I don't think any lender will currently consider a BTL loan, where the rent is not at least 120%+ of the mortgage interest.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0
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There are 100% rental coverage deals available. And some at 110%, 120% and the traditional 125%0
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You can always have a larger mortgage on your main home and a smaller one on the other.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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You can always have a larger mortgage on your main home and a smaller one on the other.
This would be the cheaper option. And you can still offset the interest against tax so you should be able to declare lovely losses every year
In a year or two, the knockdown price may be even lower than that which you could achieve this year.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0
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