BTL mortgage or increase current mortgage?
Discussion
Good evening.
I'm thinking of buying a BTL flat for around £65k, and have an offset mortgage which was taken out 8 years ago when you could get a really good deal - therefore I think we are on something like 2% at the moment tracking base rate. My mortgage is all but paid off, but we can draw up to £90k on it, so it would be easy to increase it by £65k and buy in 'cash'. My other option is to get a BTL mortgage - but most seem to be around 5%, plus at least £1000 to set up. It therefore seems much more viable to increase my current mortgage, even though I won't be able to set so much off against tax. All the 'experts' suggest taking a new mortgage would be the best course financially, but I can't see the logic of that. Am I missing something?
I'm thinking of buying a BTL flat for around £65k, and have an offset mortgage which was taken out 8 years ago when you could get a really good deal - therefore I think we are on something like 2% at the moment tracking base rate. My mortgage is all but paid off, but we can draw up to £90k on it, so it would be easy to increase it by £65k and buy in 'cash'. My other option is to get a BTL mortgage - but most seem to be around 5%, plus at least £1000 to set up. It therefore seems much more viable to increase my current mortgage, even though I won't be able to set so much off against tax. All the 'experts' suggest taking a new mortgage would be the best course financially, but I can't see the logic of that. Am I missing something?
You need to do the sums to work out if tax wise its net better off to do a buy to let (or not).
Not when I bought my overseas properties I bought them cash but increased mortgage here as the net cost/tax was far more beneficial to do it that way - mind you that was 10+ years ago now.
Not when I bought my overseas properties I bought them cash but increased mortgage here as the net cost/tax was far more beneficial to do it that way - mind you that was 10+ years ago now.
Condi said:
Interest on the BTL mortgage can be offset against tax is probably why.
I am certainly no expert though. Sarnie is your man on here, or go see a proper mortgage advisor in the real world.
Its simple to do the sums work it out one way then the other - look also at a 5 -10year timeframe too I am certainly no expert though. Sarnie is your man on here, or go see a proper mortgage advisor in the real world.
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