Buy to let how to lower my interest rate

D

Dougie

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Hi, I have a buy to let with seven years left on the mortgage. I think my interest rate is too high and am wondering how I can get it lowered. Also if I can pay more off per month should I do this and what is the best way?
 
Without knowing how much of a balance that you have left on your mortgage and what rate of interest that you are paying and what age you are it is quite difficult to give advice.
You also would have to take account of the fact that you are getting tax relief on 75% of the interest that you are paying. Say you are paying 4.8% the effective rate would be 3.6%.
With 7 years left on your mortgage you are more than likely in a good positive equity situation.
I am not sure if it would be worth all the trouble and expense of getting a new mortgage.
If you have no need for the surplus cash I would be inclined to pay down your mortgage in lump sums when you are in a surplus situation as it probably will be the best rate that you will get with deposit interest rates they way the are and the tax on the interest.
You can normally pay lump sums off your mortgage without having to make a formal arrangement with your lender.
That is the best I can think of without having the full picture.
 
Dermot said:
Without knowing how much of a balance that you have left on your mortgage and what rate of interest that you are paying and what age you are it is quite difficult to give advice.
You also would have to take account of the fact that you are getting tax relief on 75% of the interest that you are paying. Say you are paying 4.8% the effective rate would be 3.6%.
With 7 years left on your mortgage you are more than likely in a good positive equity situation.
I am not sure if it would be worth all the trouble and expense of getting a new mortgage.
If you have no need for the surplus cash I would be inclined to pay down your mortgage in lump sums when you are in a surplus situation as it probably will be the best rate that you will get with deposit interest rates they way the are and the tax on the interest.
You can normally pay lump sums off your mortgage without having to make a formal arrangement with your lender.
That is the best I can think of without having the full picture.
Click to expand...

Thanks Dermot. Balance on mortgage is 77k interest rate 5.8% and im in my 70,s.
 
Hi Dougie,

On your existing mortgage interest at 5.8% on €77,000 is €4,466 pa. After tax relief on 75% of the interest (assuming a tax rate of 50%) the cost is €2,792.

If you could remortgage at 4% the interest would be €3,080 and after tax relief €€2,792.

This is a saving of €867 in the first year, the saving would be less each year as the capital reduced. In total I calculate the saving to be €3,034. This might not be worth the trouble and cost of remortgaging.

If you do not remortgage you should definitely overpay as much as possible. You will not get a guaranteed after tax return of 3.6% (€2,792/€77,000) anywhere else.
 
I and cremegg are in agreement. Yes your mortgage rate is very high. Any harm in asking who it is with and why it is such a high rate. You could ask to have it lowered but you would not have much negotiating power. Pay down as fast as you can without leaving yourself short. As I said before pay off in lump sums as it suits you.
Good health to you
 
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