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    • superA
    • By superA 12th Mar 17, 9:42 PM
    • 2Posts
    • 0Thanks
    HELP! BTL or pay mortgage off
    • #1
    • 12th Mar 17, 9:42 PM
    HELP! BTL or pay mortgage off 12th Mar 17 at 9:42 PM
    Hello All,

    First time here and I need some help regarding property/mortgage. I am considering to see a financial advisor soon however I thought I'd get your thoughts on this.

    I am 26 years old and live with my father in London, we each own 50% of our flat and is currently worth around 300k with around 55 still owing. The interest on this is 3.39% and is fixed for the next three years and has an early exit fee of 2.5k. I pay all of the mortgage myself.

    I have savings of around 55k.

    My plan had been to purchase a BTL flat in London with my deposit, I had a offer accepted, however the seller pulled out at the last minute. My thinking was that I would get a little money left per month and the capital of the flat would increase. And after a year or two I would either be able to afford to live in this flat myself or purchase another property.

    However recently I have been thinking that perhaps with my savings I should pay off my current mortgage and be mortgage free. I wouldn't have any savings left, however it would mean that I would be able to save more money per month and that in around 16 months time I would be able to have saved enough for a deposit on a property of my own.

    Any advice or thoughts would be highly appreciated.

    Kind regards
Page 1
    • glosoli
    • By glosoli 12th Mar 17, 9:52 PM
    • 673 Posts
    • 391 Thanks
    • #2
    • 12th Mar 17, 9:52 PM
    • #2
    • 12th Mar 17, 9:52 PM
    How much is the stamp duty on any potential buy to let property (will be higher rates), along with any mortgage fees, legal fees, and regular on going maintenance costs of the buy to let (along side a contingency fund in case things go wrong / property is unoccupied etc). What would the yield be on the buy to let?

    Personally for me the costs/downsides of the buy to let option would put me off a bit.
    • superA
    • By superA 12th Mar 17, 10:16 PM
    • 2 Posts
    • 0 Thanks
    • #3
    • 12th Mar 17, 10:16 PM
    • #3
    • 12th Mar 17, 10:16 PM
    Thanks for your prompt reply... yeah I would be paying the higher rate of tax on any further purchases, mortgage fees and all the other costs involved would all add up very quickly as well as the risk involved. I estimate yield would be around 4.5% depends on what exactly I would have.

    I am also leaning towards the latter choice of paying the current mortgage off.
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