Pro's & Con's Interest Only Mortgage On Second Investment House

[JP101]

Hi, Looking for peoples opions on the Pro's and Con's of buying a second house to rent out using a interest only morgage ?

 

[Munsterdude]

Pros:
1) Keep the interest payments high over the term of the loan
2) Handy for cashflow purposes

Cons:
1) No capital repayment at all - you will always owe the original mortgage amount
2) Depending on the future sale of the house to make capital growth profit.

 

[RainyDay]

Pros:
1) Keep the interest payments high over the term of the loan

Why would high interest payments be considered a pro (except from the bank's point of view).

 

[WizardDr]

Tax deductible in full at top rate .. would be one reason;

In essence, if the only way a 2nd property works for folks is on an int only basis, then you are relying on continuing capital growth ..which will stop one of these days.