mortgage sanity check
Discussion
Morning All,
I have two mortgages which are due to expire at the end of June this year. For the past couple of months, I’ve been racking my brains as to the ‘best’ way to deal with these. I’ve gone round in circles multiple times until I’m dizzy, so thought posting here might give some helpful feedback.
Mortgage #1 is a residential mortgage on my house, Approx amount left on it is £28,500. No idea what the place is worth these days, but Zoopla says its about £450,00, which is going to be ballpark correct I would think, so probably no issue with LTV….. Currently this is with Skipton, paying 2.03%, 2yrs (left at renewal time).
Mortgage #2 is a BTL, interest only mortgage on an HMO. Approx amount left (I’ve been paying it down using overpayments each month) is £84,000. Again, no idea what its true value, Zoopla reckons £570,00, I suspect that’s low tbh (we did an big extension not long after we bought it which Zoopla doesn’t know about) but again, probably no issue with LTV. Currently with Birmingham Midshires, paying 2.58%
I have some cash kicking around, but not enough to clear both and leave me with a amount to be happy, so paying them both off completely isn’t on the cards at the moment. I know on paper I *should* pay off the residential one first, but there’s a variety of reasons that I don’t really want to do this at this point….. (I’m happy to expand, but tbh, its not relevant to this in real terms, and I waffle enough at the best of times)
The ‘best’ plan I seem to be able to come up with, is to re-mortgage our residential, on a 2yr fixed rate with Skipton (not quite the cheapest deal, but close, and changing should be painless?) @4.51% with no fees. It would increase out monthly to £1294 (current is £1219), but my spreadsheet says that if I paid off approx. £1500 of capital at re-mortgage time, the monthly would be with a few quid of the same as current. This would see us mortgage free in 27 months from now, whilst paying the same monthly as current, which I find acceptable.
The BTL is where it gets a bit ‘sticky’….. There’s a few options with this one….. If it drops onto the SVR, it will go to 8.59%, so this option doesn’t seem especially good (we might yet circle back around to this…) ‘best’ option I can find on comparison sites (2yr fixed) is with HSBC, @5.19% with no fees, so this is an option. Although I would the not be able to continue my overpayments at the same rate (im assuming that this is limited to 10% of the product per year like most?), but that’s not really any great drama, as I could stuff the overpayment I would normally pay into a stocks and shares isa or something (Merc E63 might be classed as ‘something’, right??) whilst the mortgage is running, then clear the balance in 2 years time?
The other option which I’ve been looking at, but don’t seem that ‘freely available’ are offset BTL products, which seems, on paper at least like it might answer everything I want to do?
I’ve found a sum total of ONE offering, from the ‘family building society’, which is 6.09% (discounted rate – don’t really get this tbh, but you’ll see why this may not be relevant in a mo) with £999 fees. Now this might well be ideal, in that I can in effect, pay the mortgage ‘off’ by offsetting the whole amount (am I able to do this, or is there a max offset??) whilst still having access to the cash (should I require it) for 2yrs, before just closing it down….
Final option for this one, is to circle back around to the SVR, and just let it run, but the day it drops onto it, to pay off a sizable chunk, say £50,000, so that the interest drops back to something reasonable, and I can then pay the balance off whenever I feel like it, without having to wait 2 years?
When all is said and done, id like an end game which see’s me with both of them paid off by July 2025, which is entirely doable without any significant issue, but I don’t really no the ‘best’ way to go about it all….. Obviously, I need to get the ball rolling relatively soon, especially as the BOE seem to like raising interest rates at fairly regular intervals these days!!
Anyone got any helpful input (or unhelpful, lol!), or can see anything obvious that ive missed?
I have two mortgages which are due to expire at the end of June this year. For the past couple of months, I’ve been racking my brains as to the ‘best’ way to deal with these. I’ve gone round in circles multiple times until I’m dizzy, so thought posting here might give some helpful feedback.
Mortgage #1 is a residential mortgage on my house, Approx amount left on it is £28,500. No idea what the place is worth these days, but Zoopla says its about £450,00, which is going to be ballpark correct I would think, so probably no issue with LTV….. Currently this is with Skipton, paying 2.03%, 2yrs (left at renewal time).
Mortgage #2 is a BTL, interest only mortgage on an HMO. Approx amount left (I’ve been paying it down using overpayments each month) is £84,000. Again, no idea what its true value, Zoopla reckons £570,00, I suspect that’s low tbh (we did an big extension not long after we bought it which Zoopla doesn’t know about) but again, probably no issue with LTV. Currently with Birmingham Midshires, paying 2.58%
I have some cash kicking around, but not enough to clear both and leave me with a amount to be happy, so paying them both off completely isn’t on the cards at the moment. I know on paper I *should* pay off the residential one first, but there’s a variety of reasons that I don’t really want to do this at this point….. (I’m happy to expand, but tbh, its not relevant to this in real terms, and I waffle enough at the best of times)
The ‘best’ plan I seem to be able to come up with, is to re-mortgage our residential, on a 2yr fixed rate with Skipton (not quite the cheapest deal, but close, and changing should be painless?) @4.51% with no fees. It would increase out monthly to £1294 (current is £1219), but my spreadsheet says that if I paid off approx. £1500 of capital at re-mortgage time, the monthly would be with a few quid of the same as current. This would see us mortgage free in 27 months from now, whilst paying the same monthly as current, which I find acceptable.
The BTL is where it gets a bit ‘sticky’….. There’s a few options with this one….. If it drops onto the SVR, it will go to 8.59%, so this option doesn’t seem especially good (we might yet circle back around to this…) ‘best’ option I can find on comparison sites (2yr fixed) is with HSBC, @5.19% with no fees, so this is an option. Although I would the not be able to continue my overpayments at the same rate (im assuming that this is limited to 10% of the product per year like most?), but that’s not really any great drama, as I could stuff the overpayment I would normally pay into a stocks and shares isa or something (Merc E63 might be classed as ‘something’, right??) whilst the mortgage is running, then clear the balance in 2 years time?
The other option which I’ve been looking at, but don’t seem that ‘freely available’ are offset BTL products, which seems, on paper at least like it might answer everything I want to do?
I’ve found a sum total of ONE offering, from the ‘family building society’, which is 6.09% (discounted rate – don’t really get this tbh, but you’ll see why this may not be relevant in a mo) with £999 fees. Now this might well be ideal, in that I can in effect, pay the mortgage ‘off’ by offsetting the whole amount (am I able to do this, or is there a max offset??) whilst still having access to the cash (should I require it) for 2yrs, before just closing it down….
Final option for this one, is to circle back around to the SVR, and just let it run, but the day it drops onto it, to pay off a sizable chunk, say £50,000, so that the interest drops back to something reasonable, and I can then pay the balance off whenever I feel like it, without having to wait 2 years?
When all is said and done, id like an end game which see’s me with both of them paid off by July 2025, which is entirely doable without any significant issue, but I don’t really no the ‘best’ way to go about it all….. Obviously, I need to get the ball rolling relatively soon, especially as the BOE seem to like raising interest rates at fairly regular intervals these days!!
Anyone got any helpful input (or unhelpful, lol!), or can see anything obvious that ive missed?
sasquar said:
Mortgage #2 is a BTL, interest only mortgage on an HMO.
‘best’ option I can find on comparison sites (2yr fixed) is with HSBC, @5.19% with no fees, so this is an option.
HSBC will not lend against a HMO.‘best’ option I can find on comparison sites (2yr fixed) is with HSBC, @5.19% with no fees, so this is an option.
There seems to be a few things you do not understand, I'd suggest you speak with a broker.
chrisch77 said:
Have you considered taking out a single 115k mortgage on your residential home and paying off the BTL mortgage? Surely that would be the cheapest way forward if you are aiming to pay off the BTL anyway, and you’d still be in a relatively low LTV band so should get a reasonable rate.
Ironically, i have, but the other way round (paying off my residential with money from the btl), but tbh, its not a route i want to go down. My residential is jointly owned with my better half, whereas the BTL has been around since long before she was, so thats 'mine' and seperate, dont really want to mix the two.... slightly odd, possibly, but no one has ever acused me of being in any way 'normal', so thats pretty much par for the course!!sasquar said:
Ironically, i have, but the other way round (paying off my residential with money from the btl), but tbh, its not a route i want to go down. My residential is jointly owned with my better half, whereas the BTL has been around since long before she was, so thats 'mine' and seperate, dont really want to mix the two.... slightly odd, possibly, but no one has ever acused me of being in any way 'normal', so thats pretty much par for the course!!
That’s a whole other can of worms. Gassing Station | Finance | Top of Page | What's New | My Stuff