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  • FIRST POST
    • milleniumaire
    • By milleniumaire 6th Jan 18, 2:03 PM
    • 22Posts
    • 2Thanks
    milleniumaire
    How much should I borrow?
    • #1
    • 6th Jan 18, 2:03 PM
    How much should I borrow? 6th Jan 18 at 2:03 PM
    So, I'm looking to remortgage my home and use some of the capital to pay off a buy-to-let mortgage, which requires me to borrow 110,000 on a house worth around 600,000.

    The Coventry Building Society are offering a discount rate of 1.64% for the duration of the mortgage, but will only lend 50% LTV - not a problem for me.

    At this rate I'm thinking I should borrow more than I need and "invest" the extra into a cash ISA or something like that, providing it gives a return of more than 1.64%.

    I was also considering over paying i.e. taking the mortgage out for, say 15 years, but repaying a monthly amount that would pay it off in 10 years. I'm now wondering if instead of over paying I should deposit the difference in an account (cash ISA?) that gives a higher return than the interest I'm paying.

    Of course, as the mortgage is repayment, I will have to pay more back for any extra I borrow, unless I could arrange a part repayment (upto 110K), part interest (say 40K), with the 40K surplus being invested.

    Am I missing something? Has anyone borrowed more money than they need with a view to investing it to make money as I've described above?
Page 1
    • enthusiasticsaver
    • By enthusiasticsaver 6th Jan 18, 2:15 PM
    • 6,614 Posts
    • 13,917 Thanks
    enthusiasticsaver
    • #2
    • 6th Jan 18, 2:15 PM
    • #2
    • 6th Jan 18, 2:15 PM
    There are not many cash isas paying 1.64% let alone more than that.

    I wouldn!!!8217;t consider it. . Are you sure you won!!!8217;t be tempted to spend the surplus?
    Debt free and mortgage free and early retiree. Living the dream

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • milleniumaire
    • By milleniumaire 6th Jan 18, 2:23 PM
    • 22 Posts
    • 2 Thanks
    milleniumaire
    • #3
    • 6th Jan 18, 2:23 PM
    • #3
    • 6th Jan 18, 2:23 PM
    My wife is already talking about borrowing an extra 10K to pay for a new bathroom

    I could invest the surplus in crypto currencies, which could go very well or we could lose the lot! Obviously I'm only joking! My current 3K crypto currency investment is worth 20K after 3 months. Now that's what I call a return!
    • Slave to the job
    • By Slave to the job 6th Jan 18, 6:03 PM
    • 18 Posts
    • 11 Thanks
    Slave to the job
    • #4
    • 6th Jan 18, 6:03 PM
    • #4
    • 6th Jan 18, 6:03 PM
    why remortgage then with such returns !!
    • milleniumaire
    • By milleniumaire 6th Jan 18, 7:17 PM
    • 22 Posts
    • 2 Thanks
    milleniumaire
    • #5
    • 6th Jan 18, 7:17 PM
    • #5
    • 6th Jan 18, 7:17 PM
    ...go get even more cash to invest?
    • Slave to the job
    • By Slave to the job 6th Jan 18, 7:34 PM
    • 18 Posts
    • 11 Thanks
    Slave to the job
    • #6
    • 6th Jan 18, 7:34 PM
    • #6
    • 6th Jan 18, 7:34 PM
    ...go get even more cash to invest?
    Originally posted by milleniumaire
    brillant! why not just remortgage for as much as you can and stick it all on black at the casino?
    • jamesperrett
    • By jamesperrett 6th Jan 18, 7:51 PM
    • 811 Posts
    • 439 Thanks
    jamesperrett
    • #7
    • 6th Jan 18, 7:51 PM
    • #7
    • 6th Jan 18, 7:51 PM
    That's exactly how banks work - borrowing money from deposits which they invest (lend) at a higher rate. Doing things like paying into a pension rather than over paying the mortgage make good sense but borrowing to speculate is beyond many people's risk appetite.
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