Mortgage/deposit/buy to let?A mixture? Help

[paulcockermouth]

We are in the process of looking at houses/conversion projects (we initially thought about doing a barn conversion, crazy prices quoted though, so we scrapped that.)

Now, we are looking at houses around £360k. We own our own home outright and have decided to rent it out (should get 800pm quoted by 3 agents). We have savings of 75k, but much of it is tied away with penalty if we withdraw (or its in the stock market and taken a hammering). The choices are:

1. use the 75k as a deposit (and forget interest etc) and get a mortgage for the rest.
2. take a buy to let mortgage out on our current property (thinking 100k) and resedential mortgage the rest (allowing us to claim interest payments as tax free on rent- both are into higher tax band) still allowing us to keep our savings?

Option 2 is a bit more per calender month but the tax offset and ability to keep savings appeals.... any advice from those in the know?

Thanks in advance!

[JDuck]

Speak to Scotal who is a broker. We used him for a recent house purchase and he was invaluably helpful.

James

[paulcockermouth]

Thanks for that, I have an appt with a local guy in the afternoon and if I get no decent help I will be in touch with him!

[Wings]

JDuck said:

Speak to Scotal who is a broker. We used him for a recent house purchase and he was invaluably helpful.

James

^^^^agree, with Scotal being consulted first and then possibly for tax and accountancy advice Eric also.

The OP may not possibly realise but there are so many scenarios that can arise during one’s life as a tax payer, with many personal questions needing answering, together with eventualities possibly being considered.

Interest on a loan from a residential property, can be tax allowable on a BTL, it is not therefore the status of the property the loan is attached to, but the reason for the loan, ie buy a BTL.