Pay Mortgage down or BTL
Discussion
Hi all,
I was just wondering what you guys thought I should do with some savings me and my girlfriend have.
We have 20K to play with and we could either pay our mortgage down or buy a house to rent out.
Our mortgage is currently £778 a month over 28 years (1.59% 2 year fixed)
House is currently worth around £350K and we have £213,500 to pay off.
The house we are looking at buying to rent out is on for £95,000 and there are currently tenants in until at least October paying £550 a month.
So would I be better paying my mortgage down before I start looking at buy to let or shall I go with the later?
I'm thinking the BTL is the better option or am I missing something key here?
Mortgage would be around £400 a month so plenty to play with if interest rates rise.
We save about £20K a year between us so the idea is if the first one went well to do the same again next year.
Cheers in advance all
I was just wondering what you guys thought I should do with some savings me and my girlfriend have.
We have 20K to play with and we could either pay our mortgage down or buy a house to rent out.
Our mortgage is currently £778 a month over 28 years (1.59% 2 year fixed)
House is currently worth around £350K and we have £213,500 to pay off.
The house we are looking at buying to rent out is on for £95,000 and there are currently tenants in until at least October paying £550 a month.
So would I be better paying my mortgage down before I start looking at buy to let or shall I go with the later?
I'm thinking the BTL is the better option or am I missing something key here?
Mortgage would be around £400 a month so plenty to play with if interest rates rise.
We save about £20K a year between us so the idea is if the first one went well to do the same again next year.
Cheers in advance all
Thanks for all the responses guys.
To answer a few questions this would be my first BTL so am a little wet behind the ears with certain parts of it.
My girlfriend is an accountant so she would be able to do the returns.
Apart from the 20K we also have another 6 month bill money put aside in case of emergency.
We've looked into it and done some research and this would be the details:
House we reckon we would get for £90K
Mortgage advisor has said 20% is doable so we would put a 19K deposit down meaning we have 79% LTV
£500ish solicitors fee and £400 one off charge to letting agent to sign up with them as a landlord.
We have been told the house would rent for £600 and the mortgage would be just under £400.
This is the bit that sounds a little too good to be true.
Management fees are £48 a month, rent guarantee £18 a month and landlord insurance is £20 a month so roughly £115 left over every month.
This all seems very cheap especially the rent guarantee, 3% of the rental value.
Can anyone confirm if this is roughly correct? and have I missed any other monthly costs?
To answer a few questions this would be my first BTL so am a little wet behind the ears with certain parts of it.
My girlfriend is an accountant so she would be able to do the returns.
Apart from the 20K we also have another 6 month bill money put aside in case of emergency.
We've looked into it and done some research and this would be the details:
House we reckon we would get for £90K
Mortgage advisor has said 20% is doable so we would put a 19K deposit down meaning we have 79% LTV
£500ish solicitors fee and £400 one off charge to letting agent to sign up with them as a landlord.
We have been told the house would rent for £600 and the mortgage would be just under £400.
This is the bit that sounds a little too good to be true.
Management fees are £48 a month, rent guarantee £18 a month and landlord insurance is £20 a month so roughly £115 left over every month.
This all seems very cheap especially the rent guarantee, 3% of the rental value.
Can anyone confirm if this is roughly correct? and have I missed any other monthly costs?
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