BTL Repayment

[chinnyman]

Property value approx £160k,2 bed flat.
Loan is £118,000 interest only. Repayments are £219 and a 5 year fix @ 2.19% and rent if I remember correctly is £750.

I've maxed out my ISA and Pension allowance this year.

Due to its location, near a small business park and it being leasehold etc. I can't imagine the capital appreciation would be huge but who knows.
It is in a good area with catchment for two outstanding primary schools and the houses nearby are all £500k+. I think we would probably keep it as it's relatively hassle free so far and make a bit of profit everymonth.

Is it worth overpaying once every couple of years and then change to a repayment mortgage. I was just concerned at the end of the 5 years, my profit would diminish with any interest rate rise etc. Which would just make me rely on capital appreciation - CGT for any gains

I could afford to over pay by 8-10k this year and the maybe again in a few years.

I don't think we would ever have a BTL empire, if i did purchase another one it would be under £150k or potentially a HMO for more.


And yes before anyone pips in, we have cash aside for a void period which I can't imagine would ever be that long.

[mikeh501]

Depends on your plans longer term I’d guess, but I take profits every 6 months and pay down one of the mortgages. Long term plan is to own them all outright. Not fussed about growing the portfolio at this point.

[Halitosis]

My (limited) understanding is that the vast majority of mortgages allow penalty-free repayments of up to 10% of the balance per year

[superpp]

Consider going from Interest only to repayment when your current deal ends.
We also pay the 10% allowed each year.

[chinnyman]

My wife quite likes the profit every year on interest only!!😀
But it won't last forever....
Maybe I'll pay a little off every few years then...