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Original poster

Overpay mortgage or buy to let?

15 replies

IMissGin · 10/04/2018 20:49

Just that really- if you had a lump sum you could either overpay your mortgage or use as a buy to let deposit which would you go for? Thanks

OP posts:
nannynick · 10/04/2018 20:54

I would pay it off mortgage, so reducing how long the mortgage term lasts.

I don't want to be a landlord and if I did want to be, I am not sure I would want to be and have additional debt to do so.

Adversecamber22 · 10/04/2018 20:58

Overpay mortgage for sure, as much as returns on BTL can be good if you get a void or a bad tenant you can wipe out all profit very quickly. Plus you are paying interest on your mortgage.

pigshavecurlytails · 10/04/2018 21:00

depends on the LTV you could get on a buy to let.

Viviennemary · 10/04/2018 21:00

I would certainly consider buy to let. It would depends on how old you are and what pension provisions you have. What income you'd get from it. And if it's worth the headache of a buy to let. So it's a question of doing the sums and finding out if a net income after expenses and tax is worth doing it.

PurpleDaisies · 10/04/2018 21:01

I’d overpay the mortgage. I can’t wait for ours to be gone.

BritInUS1 · 10/04/2018 21:04

BTL also remember the tax implications and the changes in the tax rules re mortgage interest

Original poster
IMissGin · 10/04/2018 21:35

We are pretty young (although partner 8y older) we have c35% equity in our own house. Would put 25% on btl but that would only be around 3.5% on our own home. I have good retirement provisions, my partners pension pot it ok but nothing great. Money currently sat in ISA doing not a lot as I can’t make a decision.

OP posts:
greathat · 10/04/2018 21:38

Have you looked at offset mortgages? You can keep money accessible but it reduces the interest paid on the mortgage www3.firstdirect.com/mortgages/offsetzone-reusable-money-non-flash.shtml

Original poster
IMissGin · 10/04/2018 21:40

Yep, we’re half way through a 5y fix but I think we’ll definitely go for offset next time.

OP posts:
Tigresswoods · 10/04/2018 21:40

Overpay the mortgage. We started doing that more than a decade ago & have been mortgage free for 3 years now. It's an amazing feeling.

BTL is so over. Too much tax & complication.

Original poster
IMissGin · 10/04/2018 21:45

We are overpaying already although could do more without penalty, maybe that is more sensible. I guess I liked the idea of an investment that wasn’t tied up in our primary home incase we ever needed it.

OP posts:
Firstworlddramas · 11/04/2018 06:27

Sounds like you have a decent position, albeit a big mortgage, get that paid off or at least max overpayments each year and once that's done you can risk your money a bit more

pigpoglet · 11/04/2018 06:45

We have a buy to let , we pay a handling company to arrange everything 12% of the rent . It has a great rent of £900 a month . We did have a non payer but the rent was covered by the company so apart from having to empty the flat ( I gave everything away on fb so it was collected ) it really wasn't a problem . It isn't always a nightmare having a btl... having said that the flat was bought with cash so every month is in the pocket . I guess have a mortgage on it would negate that .

stressedoutpa · 11/04/2018 06:45

Overpay the mortgage.

AlphaApple · 11/04/2018 07:05

BTL is not a particularly good investment anymore now they've changed the tax treatment. Also, mortgage rates are on the rise.

Pay off your mortgage and look at investment bonds or stocks and shares.

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