Buy to Let Mortgages
Discussion
Our 5 year fixed rate (around 5%) is coming to an end on 1 October. Our mortgage payments will then revert to SVR (and an increase of getting on for £200 pm), which is currently 6.75% with Bristol & West.
Any reasonable deals out there? Property value around £180K. Mortgage £124,500 interest only. No redemption fees with B&W, just mortgage exit fee of £195.
Thanks
Mrs G
Any reasonable deals out there? Property value around £180K. Mortgage £124,500 interest only. No redemption fees with B&W, just mortgage exit fee of £195.
Thanks
Mrs G
As a BTL landlord I have always gone for an offset mortgage, and although at present I am with Intelligence Finance, I do rather like the First Direct offset mortgage.
In the past offset mortgages always had higher interest rates than the conventional type of mortgages, but today, and especially with the First Direct one, interest rates are very competitive.
With an offset mortgage one is allowed to make overpayments, those payments which then reduce the balance of the mortgage/loan outstanding, and since you pay interest only on the loan outstanding, thereby reduces the interest you are paying. Since one also has cheque and pay book facilities I use the account to pay in all my rental income and expenditures.
In my own case I have recently overpaid the amount of the original loan, £250k, but with 3 years remaining on the mortgage term, if I should require that money, £250k, to buy a further BTL property, then I am at liberty to withdraw the monies.
First Direct’s link, which includes their mortgage calculator is here;
http://www.firstdirect.com/legals/mortgage_idd.sht...
In the past offset mortgages always had higher interest rates than the conventional type of mortgages, but today, and especially with the First Direct one, interest rates are very competitive.
With an offset mortgage one is allowed to make overpayments, those payments which then reduce the balance of the mortgage/loan outstanding, and since you pay interest only on the loan outstanding, thereby reduces the interest you are paying. Since one also has cheque and pay book facilities I use the account to pay in all my rental income and expenditures.
In my own case I have recently overpaid the amount of the original loan, £250k, but with 3 years remaining on the mortgage term, if I should require that money, £250k, to buy a further BTL property, then I am at liberty to withdraw the monies.
First Direct’s link, which includes their mortgage calculator is here;
http://www.firstdirect.com/legals/mortgage_idd.sht...
Taking fee's into account there are several that could save you a bit, not a great deal but a bit (6.75% isn't that much higher than the lowest available when you factor in fees) From a cashflow perspective you could improve considerably though, should easily be able to bring payments down £100+ a month. Drop me a line if you want to go through more details.
Wings said:
As a BTL landlord I have always gone for an offset mortgage, and although at present I am with Intelligence Finance, I do rather like the First Direct offset mortgage.
In the past offset mortgages always had higher interest rates than the conventional type of mortgages, but today, and especially with the First Direct one, interest rates are very competitive.
With an offset mortgage one is allowed to make overpayments, those payments which then reduce the balance of the mortgage/loan outstanding, and since you pay interest only on the loan outstanding, thereby reduces the interest you are paying. Since one also has cheque and pay book facilities I use the account to pay in all my rental income and expenditures.
In my own case I have recently overpaid the amount of the original loan, £250k, but with 3 years remaining on the mortgage term, if I should require that money, £250k, to buy a further BTL property, then I am at liberty to withdraw the monies.
First Direct’s link, which includes their mortgage calculator is here;
http://www.firstdirect.com/legals/mortgage_idd.sht...
I thought Offsets weren't available to BTL'ers.In the past offset mortgages always had higher interest rates than the conventional type of mortgages, but today, and especially with the First Direct one, interest rates are very competitive.
With an offset mortgage one is allowed to make overpayments, those payments which then reduce the balance of the mortgage/loan outstanding, and since you pay interest only on the loan outstanding, thereby reduces the interest you are paying. Since one also has cheque and pay book facilities I use the account to pay in all my rental income and expenditures.
In my own case I have recently overpaid the amount of the original loan, £250k, but with 3 years remaining on the mortgage term, if I should require that money, £250k, to buy a further BTL property, then I am at liberty to withdraw the monies.
First Direct’s link, which includes their mortgage calculator is here;
http://www.firstdirect.com/legals/mortgage_idd.sht...
I'm sure IF wont lend and i'm 100% certain First Direct dont either.
How did you get around this? i'm intrigued.
First Direct’s link, which includes their mortgage calculator is here;
http://www.firstdirect.com/legals/mortgage_idd.sht...
[/quote]
I thought Offsets weren't available to BTL'ers.
I'm sure IF wont lend and i'm 100% certain First Direct dont either.
How did you get around this? i'm intrigued.
[/quote]
Loan is against my home, which for tax purposes the interests can still be deductable, since the monies are being used to purchase a BTL.
You may well discover the Loan To Value has tightenned, depends on the valuation you get and as such the interest rate is likely higher if the value of your property has dropped too much. On a worst case basis you might be stuck on a SVR mortgage and have to put up the rent to cover costs. Good luck.
knk said:
The interest on your residential mortgage is not a tax deductible even when remortgaged to for a BTL.
The borrowing must be secured on a property which is part of your rental portfolio.
Wrong; as Eric Mc posted on 29 February 2008, I quote "The key to allowability of loan interest as a tax deduction is the PURPOSE of the loan, not how it is secured." end. The borrowing must be secured on a property which is part of your rental portfolio.
Therefore, one can secure against one's home to buy a BTL, with the interest being an allowability for tax purposes.
Cheers guys. The value I put on the flat was probably conservative. There is another one in the same block for sale at £179K, but ours has an extra bathroom and an extra parking space. I know values are plummeting, but flats around where I live (near Oxford) seem to be holding out pretty well.
A client of mine specialises in sourcing Buy to Let mortgages so if you have trouble finding what you need it may be worth giving them a try.
audidoody said:
A 2-bed, 2-bath flat I was thinking of taking a BTL punt on a year ago in London N1 hasn't dropped at all. Asking prices for similar flats in the building are the same as a year ago.
Are they selling though? The asking price may not have changed but they may not be getting that much (assuming they are not just sitting on the market).Gassing Station | The Pie & Piston Archive | Top of Page | What's New | My Stuff