Powerkiter

I am just after peoples opinion if they have buy to let mortgages.

Is the mortgage repayment or interest only ?

imlach

The choice is entirely yours.

davegtt

Get a choice IIRC.

Think you have to put down a fair size deposit on the house though 25% or something like that?

Powerkiter

I have 25% deposit on the house.

However, if you pay off any capital (i.e. repayment mortgage) you are taxed on the amount that reduces the capital. The monthly payments on a repayment mortgage would be more than the rental income. The monthly repayments on a interest only mortgage would be less up to 20% less than the rental income.

Most advisors i have spoken to suggest that the majority of buy to let mortgages are interest only !

fast bloke

interest only is more tax efficient. Depends what you are buying the house for. If you plan to sell it a few years down the line then you may as well go interest only. If you plan to keep it to provide you pension income then repayment is the way to go. You will probably have to add some of your own income to it now, but once it is paid off you will get an inflation proof income. Then you can pass it on when you pop your clogs.


(usual mortgage caveats should go here )

fast bloke

p.s. - you can do it with 15% deposit

3times

depends where your buying. Home Counties you need around 25% deposit to make it work on most of the lenders rental calculation.

saying that C&G have now changed their criteria to 125% of payrate.

fast bloke

There are lenders who will work it from rental income and earned income. I usually use UCB if I need a stretch on the rental. Other than that keeping a good relationship with B&M surveyors is also handy

Chip

Interest only on mine. Speak to a good financial adviser and he'll explain why.

Chip

Deep Singh

Theoretically you could have 0% deposit if you have enough equity in your home/property portfolio.

Anyway, whilst we've got the IFAs around I'd like to ask a quickie. At the best interest rate available at the moment (fixed for 2 years) what is the cost of repayment(interest only) per £1000 borrowed?

fast bloke

purchase or remortgage?

fast bloke

Northern rock - 3.99% - no extended redemption - 1.5% arrangement fee £3.32 per thousand
Bristol & West - 4.74% - no extended redemption - no arrangement fee £3.95 per thousand

john banks

90% of that being your cut fast bloke?

fast bloke

nah - all the lenders are trying to get their products to the top of our sourcing systems and into the papers with low headline rates. You pick up the paper and say - ohhhhh Northern Rock - 3.99 I'll call them and get a mortgage. We get paid pretty much the same regardles of which lender we use for similar type products.

john banks

It was a joke, sorry, check your figures?

fast bloke

I know - but shhh!! - if people find out I get paid that much I wont be able to charge them a broker fee as well

john banks

You like moving decimal points around in post 12?

fast bloke

didn't change it - you sure your glasses aren't dirty?

john banks

Do you need to change it as it looks like I could only afford a £100k mortgage with those figures?

john banks

How many hints do I need to make ?

or is it me that should have failed at maths?

P20SPD

iTrader: (1)

PMSL, nicely spotted John, and thats INTEREST ONLY

fast bloke

DOH!! -

sorted

john banks

[ smart alec ]

"Here at fast bloke mortgages inc, we believe in paying off your mortgage fast. Why be saddled with high interest rates? With our tailored solutions you can encapsulate all your debt into one easy monthly payment, and perhaps give yourself a little treat. How about that new car or holiday, perhaps education for your children? Call now..."

[ /smart alec ]

fast bloke

you been reading my website?

Deep Singh

Fast bloke is that for purchase or remortgage and how long are they fixed for?

Thanks
Deep