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[Finance] Buy to Let Mortgages



Renegade1

New member
Mar 7, 2018
385
I can understand why you’d want a repayment mortgage on your own property but why on a BTL investment? Interest only is much cheaper, and you’re more like to break even/make a small profit every month. Of course then you’d hopefully get your deposit back plus equity when you sell?

Repayment mortgage on a BTL seems more hassle than it’s worth? Genuine question!


Sent from my iPhone using Tapatalk

Did you read my post properly?

As I said,I believe it's better to take out an INTEREST ONLY mortgage because it gives you flexibility as I have already mentioned.
Yes you can just pay the interest and use the rest of the rent to party or you can use the mortgage like a bank account.Pay
more money in then you need to then when you sell you will get it back.
 


mikeyjh

Well-known member
Dec 17, 2008
4,473
Llanymawddwy
Did you read my post properly?

As I said,I believe it's better to take out an INTEREST ONLY mortgage because it gives you flexibility as I have already mentioned.
Yes you can just pay the interest and use the rest of the rent to party or you can use the mortgage like a bank account.Pay
more money in then you need to then when you sell you will get it back.

Which page of 'Personal Finance for Dummies' is this particular gem from?
 


Renegade1

New member
Mar 7, 2018
385
Which page of 'Personal Finance for Dummies' is this particular gem from?

What an idiotic post from a moron.I was explaining as to why I believe interest only is better.
If everyone was to take your approach and criticise statements which are obvious then this forum
would have twice as many posts.

Grow up.
 


LlcoolJ

Mama said knock you out.
Oct 14, 2009
12,982
Sheffield
What an idiotic post from a moron.I was explaining as to why I believe interest only is better.
If everyone was to take your approach and criticise statements which are obvious then this forum
would have twice as many posts.

Grow up.
...
34e8c6df08246286354ca4de5ad385f7.gif
 


Herr Tubthumper

Well-known member
NSC Patreon
Jul 11, 2003
59,198
The Fatherland
Excellent work.
 






Biscuit

Native Creative
Jul 8, 2003
22,205
Brighton
Did you read my post properly?

As I said,I believe it's better to take out an INTEREST ONLY mortgage because it gives you flexibility as I have already mentioned.
Yes you can just pay the interest and use the rest of the rent to party or you can use the mortgage like a bank account.Pay
more money in then you need to then when you sell you will get it back.

Alright mate don’t get your knickers in a twist. As it happens I’ve gone interest only on my BTL too, because of the flexibility but wondered why others might prefer repayment. No need to be so passive aggressive about it :thumbsup:


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Renegade1

New member
Mar 7, 2018
385
Alright mate don’t get your knickers in a twist. As it happens I’ve gone interest only on my BTL too, because of the flexibility but wondered why others might prefer repayment. No need to be so passive aggressive about it :thumbsup:


Sent from my iPhone using Tapatalk

Look mate.Enough with your aggressive passive aggressive posts sent in an aggressive way with some passive intent.
I said nothing about taking out repayment mortgages so couldn't understand why your post assumed I had that's all.

Yes makes no sense to take out a repayment and therefore you're stuffed if the property is empty for a while etc.
I understand that some landlords just take the profit and don't pay more than the interest that is due.
However obviously before the mortgage comes to an end you will have to sell up.

It seems strange in a way that you can take out a BTL interest only mortage without stating how you intend
to deal with the property/mortgage when the term is up.

Perhaps lenders just assume the landlord will sell up before it ends.
 




Biscuit

Native Creative
Jul 8, 2003
22,205
Brighton
Look mate.Enough with your aggressive passive aggressive posts sent in an aggressive way with some passive intent.

Late to the party, [MENTION=36494]Renegade1[/MENTION]’s a nutcase isn’t he?

Oh well, another name for the list!


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Herr Tubthumper

Well-known member
NSC Patreon
Jul 11, 2003
59,198
The Fatherland


Triggaaar

Well-known member
Oct 24, 2005
49,987
Goldstone
If you're not in it for a monthly profit but instead want a long term investment then repayment is obviously far better as you're building up equity in the property every month.
As I said,I believe it's better to take out an INTEREST ONLY mortgage because it gives you flexibility as I have already mentioned.
Yes you can just pay the interest and use the rest of the rent to party or you can use the mortgage like a bank account.Pay
more money in then you need to then when you sell you will get it back.
As long as you can count the interest element against income for tax purposes, you're better off having interest only. It's not swings and roundabouts, it's just better.

If you have enough money to pay the same as a repayment mortgage would cost, that's great, you can put the difference into an ISA, or invest it in another way.
 




Triggaaar

Well-known member
Oct 24, 2005
49,987
Goldstone
[MENTION=3887]Uncle Spielberg[/MENTION] - when people take out a BTL interest only, and they keep the property, obviously at the end of the mortgage term they are supposed to repay the mortgage. What happens if they don't (they don't have the money)?

Do they have a set period of time in which they are allowed to sell the property, before it's repossessed and stuck in an auction?
Assuming the property owner has always paid the interest on time, do they have any right to extend the mortgage term?
What interest rate do they pay from the day the mortgage ends until the day the debt is settled?

Thanks
 


Uncle Spielberg

Well-known member
NSC Patreon
Jul 6, 2003
42,779
Lancing
[MENTION=3887]Uncle Spielberg[/MENTION] - when people take out a BTL interest only, and they keep the property, obviously at the end of the mortgage term they are supposed to repay the mortgage. What happens if they don't (they don't have the money)?

Do they have a set period of time in which they are allowed to sell the property, before it's repossessed and stuck in an auction?
Assuming the property owner has always paid the interest on time, do they have any right to extend the mortgage term?
What interest rate do they pay from the day the mortgage ends until the day the debt is settled?

Thanks

They will have out down 25% at the start so unless the market falls by over 25% during the term there is no issue, if not some buy to let lenders lend to age 90 they can use
 


Triggaaar

Well-known member
Oct 24, 2005
49,987
Goldstone
They will have out down 25% at the start so unless the market falls by over 25% during the term there is no issue
I know there should be enough equity in properties that have both started with a decent deposit and gone through decades of price rises - I'm asking about the mechanics of when the property owner leaves it to the last minute, and then the mortgage is due to be repaid. How much time do they have, what interest do they pay in the meantime etc?
 




Herr Tubthumper

Well-known member
NSC Patreon
Jul 11, 2003
59,198
The Fatherland
As long as you can count the interest element against income for tax purposes, you're better off having interest only. It's not swings and roundabouts, it's just better.

If you have enough money to pay the same as a repayment mortgage would cost, that's great, you can put the difference into an ISA, or invest it in another way.

If you have the cash to pay down the mortgage monthly, why is it better to put it in an ISA? I would have thought paying down the mortgage, and in turn slowly reducing your interest payments, would be better? Are you assuming the ISA interest is greater than the mortgage interest payment reductions?
 


LlcoolJ

Mama said knock you out.
Oct 14, 2009
12,982
Sheffield
If you have the cash to pay down the mortgage monthly, why is it better to put it in an ISA? I would have thought paying down the mortgage, and in turn slowly reducing your interest payments, would be better?
Plus you don't end up with the scenario Trig is asking about. You end up owning the property.
 


Herr Tubthumper

Well-known member
NSC Patreon
Jul 11, 2003
59,198
The Fatherland
Plus you don't end up with the scenario Trig is asking about. You end up owning the property.

Quite. I’m struggling to see why it’s beneficial.
 


Springal

Well-known member
Feb 12, 2005
23,708
GOSBTS
Quite. I’m struggling to see why it’s beneficial.

Me too. Unless the interest rate on savings or an ISA is more than the mortgage, surely you're better off paying down the mortgage?
 




Renegade1

New member
Mar 7, 2018
385
As long as you can count the interest element against income for tax purposes, you're better off having interest only. It's not swings and roundabouts, it's just better.

If you have enough money to pay the same as a repayment mortgage would cost, that's great, you can put the difference into an ISA, or invest it in another way.

So as an ISA should have a higher interest rate than a mortage it's better rather than to overpay an interest only mortgage,put that overpayment into an ISA?
What are ISA rates?


I would be interested to know for every 100m invested in this country what this money is invested into and what percentage.Am I right to assume the No 1 investment would be property?
 


Triggaaar

Well-known member
Oct 24, 2005
49,987
Goldstone
If you have the cash to pay down the mortgage monthly, why is it better to put it in an ISA?
It's all about tax. When you earn revenue from rent, you pay tax on that revenue, but only after you have deducted the interest on the loan you used to purchase the property. If you pay down the mortgage, then the amount of interest you're paying on the property goes down, so you pay more tax.

Of course paying less interest is good, but that's balanced by your alternative use of the cash earning interest. If you're investing in BTLs, then you should be doing well with your investments - better than using the cash to pay off a mortgage and increase your tax.

An alternative to ISAs etc would be to repay the mortgage on your home instead. You're not getting tax relief on that anyway, so repaying that is good.

I guess the exception would be if you've got a rubbish BTL mortgage and your rate is much higher than you can earn with investments.
 



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