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Overpay buy to let or residential mortgage?

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Author Topic: Overpay buy to let or residential mortgage?  (Read 1214 times)
Posts: 5

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« on: August 23, 2019, 01:12:23 PM »

Hi there , just bouncing a few ideas around , I have a residential repayment mortgage 40000 15 years to go and a buy to let interest only 80000 mortgage, which one makes more sense to overpay?
Any ideas much appreciated, at the moment I tend to overpay the buy to let.
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Posts: 493

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« Reply #1 on: August 23, 2019, 02:29:07 PM »

Generally speaking, you're best paying down the one that costs the most.

Which one has the higher interest rate?
What are the restrictions/charges for making overpayments?
Is one or the other on a good deal that's due to end in the near future?
Do both properties have enough equity to give you access to the best rates if you do remortgage?

N.B. when comparing the costs, don't forget that you do still get some basic rate tax relief on interest related to property rental.
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« Reply #2 on: August 23, 2019, 02:48:00 PM »

It's the last point that might make the biggest difference.

Otherwise it can just be an APR (or other terms and conditions) trade-off.

The rest is philosophical... do you make the roof over your own head more secure, or your investment? All being equal-ish I would probably go residential because of the philosophy I hold. As you current overpay on the BTL you may just naturally hold a different philosophy to me.
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