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Interest only vs regularl repayment

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Author Topic: Interest only vs regularl repayment  (Read 678 times)
Newbie
Posts: 10

I like property

« on: January 10, 2018, 12:54:34 AM »

Hello

This is my first BTL property and I although I feel I can achieve the full repayment mortgage plus an extra 200, I have opted for the interest only mortgage with the option to pay up to 10% overpay towards principle and of course I am going to put the rest in the bank to pay more down at the end of the 2 year term.

My thought process is for the first 2 years in the game, I donít want to get caught out by any unexpected expenses or crises.  The buy to let interest only rate is 1.85 so I feel this seems like a reasonable move.

Am I missing something, does this sound reasonable??

« Last Edit: January 10, 2018, 11:18:37 AM by CCUK »
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Sr. Member
Posts: 357

I like poetry

« Reply #1 on: January 11, 2018, 09:49:51 PM »

It's a reasonable approach, so long as you do have the self-discipline to keep putting aside the extra capital every month. There is a cost penalty, as compared with a full-on repayment mortgage, but the flip side is you've got that extra bit of liquidity for if the boiler goes pop or your tenant stops paying the rent or whatever.
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