One Mortgage or Two

[highorlow]

I have 2 properties, one a section 23 investment.

Is there any benefit for me to release the equity in my Principal Private Residence which would enable me to clear the investment mortgage?

I would still be left with a 90% mortgage on my PPR based on current values.

 

[ClubMan]

Is there any benefit for me to release the equity in my Principal Private Residence which would enable me to clear the investment mortgage?

I would still be left with a 90% mortgage on my PPR based on current values.

Why would you do that when you can write off 100% of the interest on any loans used to purchase/renovate the investment property against rental income from that property whereas the interest relief on your PPR mortgage is limited and at standard rate only?

 

[highorlow]

Why would you do that when you can write off 100% of the interest on any loans used to purchase/renovate the investment property against rental income from that property whereas the interest relief on your PPR mortgage is limited and at standard rate only?

The Investment property is a section 23, i think this gives me relief on its rental income?

My PPR will probably end up been an investment property also before the year is out as i will be married.

 

[ClubMan]

OK - I have no idea how Section 23 works. But judging by the question mark above I'm not sure if you do either?

I presume you have figured out the tax implications of renting out your current PPR?

I would recommend that you get independent, professional advice in case you make a costly mistake.

 

[ranger]

Hiorlow,

Sec 23 is only really beneficial if you have one or two investment properties. This enables you to offset the rental income from the invest. properties against the Sec 23. If you are going to don anything with you PPR why not remortgage to buy another invest prop. I personally would not be doing anything to my PPR to pay off the Sec 23 property early.


Ranger