BTL mortgage and working out profit with tax changes

[Z064life]

Hi All,

So I currently have a BTL mortgage, which I got in 2010 when property prices were "reasonable" (i.e. you could get a property for 250k). The house is now worth 420k and there's 170k left on the mortgage.


Some shopping around can get me a BTL mortgage @ 1.8% interest.

With the tax changes, is there a calculator that is simple enough to use to see how much profit I'd make (or lose) with the coming tax relief changes? I am confident I can make some profit with the equity I have.


Thanks

[Ozzie Osmond]

If I've got my figures right you've made £150,000 on your BTL and are worrying about £612 p.a. of additional outgoings.... Are you sure you're cut out for this line of business?

You could Google "btl tax changes calculator". Loads of info' there.

[Audemars]

The aim of BTLs is to not have too much equity. Release the equity and invest it elsewhere eg another property. With a low LTV ratio you are paying less interest on your mortgage meaning you are not maximising what you can offset in tax.

[Sir Bagalot]

Audemars said:

The aim of BTLs is to not have too much equity.

Not for all.

Audemars said:

Release the equity and invest it elsewhere eg another property. With a low LTV ratio you are paying less interest on your mortgage meaning you are not maximising what you can offset in tax.

Another one who thinks you can offset your entire mortgage interest against tax. You can't. You can only offset a maximum of what the BTL was worth when it first entered the rental market.

Edited by Sir Bagalot on Thursday 9th June 13:30