Can I ask for some advice please? We have a rental property, on interest only, with 140K owed, and the mortgage ends in Dec 2015, so I will owe 140K in Dec. I only have 40K in savings, so I think my options are: (1) Sell the house, it is probably worth 150K, there would only be a small CGT, so this option would clear all debt. (2) Remortgate the house, get another mortgage for say 120K. At say 6% for 20 years, the repayments are 860 per month. The rent is only 600 per month, I don't have any problem paying the difference monthly. However, if I sell now, I am selling at the bottom of the market. So, if I remortgage and sell in say 5-10 years time, I should get much more for the house.
Our PPR is on an interest only tracker, with 400K due in 20 years, which would be covered with the sale of a second rental property we have, which is mostly paid off. Any thoughts on our options?