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Tax - Renting and offset mortgages
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However, if I withdraw all my facility (i.e. 70k) bang that in a high interest account - I will be paying no tax (as the interest payments will be about the same as the rental income) but will be earning the return on the 70k.
You could do that, then the interest you pay on the mortgage would be an allowable expense against the rental income.
Whether its worthwhile paying tax on your savings to avoid paying tax on the rental income I doubt. Using ISAs etc to give you tax free savings would be worthwhile.
Do check that your new mortgage will also give you consent to lease. Often they won't, if you remortgage with tenants in place you usually need to get a BTL mortgage.
BTL offset mortgages are very thin on the ground.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 -
The virgin people have indicated (in the past) they're happy for me to rent it out - I'm renting (called the top of the property market last year when my daughter was born and decided to rent for a year to see what happened rather than spluff 600k on a house). Man is that proving a good call! It would have been a perfect call if only I had shifted the dam flat!0
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