Buy to Let

Mortgage Help

It’s a fact. Hundreds of people who have a mortgage could be paying too much for it! And, as your mortgage is probably your single biggest expense, it is worth shopping around.

If you already have a Buy to Let property, remortgaging, remortgage or remortgages could save you money – especially if you took your mortgage out before 1996. Before this date, Buy to Let mortgages didn’t exist and borrowers had to rely on what were known as commercial mortgages (which were usually very expensive). Remortgaging your Buy to Let will not only allow you to find a better deal, but you could also free up capital that can then be used to put down a deposit on another property!

Even if you have ‘lock in’ clauses that tie you to a mortgage for a period of time, you may still be able to save money – our mortgage advisors are specialists in Buy to Let and will be able to advise you if this is a feasible option. And, with Homebank Financial Services, you can be assured that we will always base our advice on what is best for you. We may be able to balance out any costs involved with remortgaging against any savings you could make with a lower interest rate. Our mortgage advisors will always clearly indicate any costs and savings for you to consider.

Other Costs to Consider
When thinking of buying a property to let, it is important to take into consideration other costs, such as:

Income Tax: this is payable if you have a second property that you are letting out – this is because it is classed as a second income and is therefore liable for tax. The amount of tax you pay will be based on the profit made from the property – calculated as the gross rental income minus any costs relating specifically to the running of the property.

Insurance: if you have insurance on the property - such as building/public liability insurance, policies on white goods, etc – these can be written off against your tax bill.

Maintenance: if you carry out any repairs and maintenance on the property you can apply for tax deductions, but it is advisable to check where such deductions apply as this can be something of a grey area.

Wear and Tear: when letting a furnished property, a 10% depreciation on all your furnishings (but not your fittings) is applicable.

Deductible costs may include:

Management/letting agents fees – because of the tax breaks applicable here, it may actually pay to have someone else manage your property.

With a Buy to Let mortgage you may also able to offset interest payments against tax (but not capital payments). This makes interest only mortgages a popular choice, but it is also best to get advice as if your second property is intended to provide you with a long term saving plan (eg: an alternative to a pension) as a repayment mortgage may make more sense. Our brokers can advise you on all the pro’s and cons of the different types of options and show you exactly how and where you can save money.

It is also worth noting that if you sell your Buy to Let property you may have to pay Capital Gains Tax on any capital that is accrued. As this is a complicated area, it is worth calling us to make an appointment with one of our financial advisors.

 
To save money on your buy to let remortgaging, remortgage and remortgages call 0800 052 3604 or Click Here to contact Homebank today.

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