BTL Mortgage Sense check
Discussion
Exciting Saturday night here doing some admin - I said I'd have a look at something for a friend who has become an accidental landlord
2 properties owned in a ltd co
One mortgage free
One with a mortgage of 167k on a house valued at 275k
Other house is worth about the same at 275k
Fixed rate is coming to an end and the best on offer so far is either
2 year fix @ 5.79%
1.5k fees
interest only payments of 817
5 year fix @ 4.99%
5k in fees!!
interest only payments of 718.80
Does this seem "about right"?
2 properties owned in a ltd co
One mortgage free
One with a mortgage of 167k on a house valued at 275k
Other house is worth about the same at 275k
Fixed rate is coming to an end and the best on offer so far is either
2 year fix @ 5.79%
1.5k fees
interest only payments of 817
5 year fix @ 4.99%
5k in fees!!
interest only payments of 718.80
Does this seem "about right"?
TownIdiot said:
She's getting divorced.
I suppose she was party to it prior to this but didn't really have anything to do with it before separation.
It's been a long time since I've done residential BTL - thin gruel these days isn't it!!!
She should probably sell. The economic climate is putting more strain on tenants, and hence on landlords.I suppose she was party to it prior to this but didn't really have anything to do with it before separation.
It's been a long time since I've done residential BTL - thin gruel these days isn't it!!!
She should definitely sell if she can’t afford to cover 6 months rent and a full refurb (that being her worst case exposure).
It is not a game to be in if your risk bearing capacity is limited.
LooneyTunes said:
She should probably sell. The economic climate is putting more strain on tenants, and hence on landlords.
She should definitely sell if she can’t afford to cover 6 months rent and a full refurb (that being her worst case exposure).
It is not a game to be in if your risk bearing capacity is limited.
I absolutely agreeShe should definitely sell if she can’t afford to cover 6 months rent and a full refurb (that being her worst case exposure).
It is not a game to be in if your risk bearing capacity is limited.
Not really possible at the moment as there is a long term tenant and divorce isn't fully finalised.
Looks like the plan is a two year fix and work towards selling over that period.
Looking at the numbers it's difficult to see how it works for anyone at this level - you'd have to believe there is some serious house price growth on the horizon.
TownIdiot said:
Looking at the numbers it's difficult to see how it works for anyone at this level - you'd have to believe there is some serious house price growth on the horizon.
And then have to pay some serious capital gains or inheritance tax if you leave it to your children.I agree it doesn't make sense, I have one and it returns me about the same as sticking the cash in a Marcus account. But it is part of my retirement plan, and who knows what will happen with interest rates over the next 10 years.
It doesn’t make sense if you only have one or two and, if you ended up with the, by accident, didn’t think through what you were buying/doing. If you’ve got a few more than that, and structure things properly, it certainly can do.
It’s all well and good comparing to deposit accounts, but it’s only been in very recent months that there has been any return at all from those.
It’s all well and good comparing to deposit accounts, but it’s only been in very recent months that there has been any return at all from those.
ThingsBehindTheSun said:
And then have to pay some serious capital gains or inheritance tax if you leave it to your children.
I agree it doesn't make sense, I have one and it returns me about the same as sticking the cash in a Marcus account. But it is part of my retirement plan, and who knows what will happen with interest rates over the next 10 years.
I suppose the tax is the same whatever asset you are in.I agree it doesn't make sense, I have one and it returns me about the same as sticking the cash in a Marcus account. But it is part of my retirement plan, and who knows what will happen with interest rates over the next 10 years.
One poster has said the mortgage quotes are "about right" - if that's the case doesn't really seem worth expending too much energy on it.
One thing is for sure - I definitely wouldn't be getting into standard residential BTL these days.
LooneyTunes said:
It’s all well and good comparing to deposit accounts, but it’s only been in very recent months that there has been any return at all from those.
Exactly, hence why I would not sell up, pay the capital gains and put the money in one of these. On a similar note, the S&P 500 has performed well over the last few years, but may not in the future.I am quite happy to keep the BTL for now, it's more of a long term retirement plan thing.
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