Should I remortgage now or just pay off ?

Hi folks
Just looking for some advice
I am currently 47, in a 5 bed family home with 60K owing on a tracker of 1% with BOI - 9 years left - property value 500,000
I'm in a good job in IT in the public sector and just been offered a promotion so only way is up with job etc and earning 60k - granted no bonus but security
The family home has a granny flat on the side for 1-2 people that brings in 800 a month and under Rent a room relief so that ultimately pays the mortgage along with SKY and refuse bills for both the family home and the flat
Now as i am only in the public sector 6 years, my pension is dirt.
I am looking to invest in another property for a pension.
There are a couple of 2 beds in my area in the region of 155,000 with a HAP rental income of 1000 a month.
So i was considering surrendering my tracker on the family home and remortgaging for 200,000 for 20 years as my LTV is still under 50%
The repayments would be around 1100 a month for the next 20 years and this would be also covered not only by the rental on the 2nd property purchase but also by the granny flat on the side of the family home.
Given my age i don't think i'll be able to have this borrowing capacity - then on the flip side and my dads advice 'pay the mortgage off quick and don't ever borrow' - while his advice has paid off well up to now i don't want to sacrifice the opportunity of being able to invest in my pension while i can
i'm in good health thank god
Any advice would be most welcome

Might go against the mainstream but I would not “Invest” in property if you do not have the cash.
I think it is unwise to todo so unless you have at least 50% of the purchase price in savings.

Re-mortgaging your PPR to get a BTL is madness.

If you want to invest in a pension, then invest in a pension.

If you are able to remortgage, I doubt it would be at attractive rates.

But in any event, you should not do so to invest in property.

It might be worth considering a remortgage to bump up your pension which would be the most tax-efficient form of long-term saving for you. Though I doubt that the bank would allow you to remortgage for these purposes.

Brendan

Edenbridge14 said:

So i was considering surrendering my tracker on the family home and remortgaging for 200,000 for 20 years as my LTV is still under 50

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Will the bank let you do that?

When I asked BoI a few years back they told me they only did equity release for home improvements.

Never heard of remortgaging you boost a pension. How does that work?

If you want to buy a BTL the bank is unlikely to just do an equity release on your own home, they will want you to do a mortgage on the new BTL for max percentage whatever that is these days, used to be 80% for BTL, then you would usually do a top up on your own home for the balance if the amount was below top up levels or a full remortgage if amount was above what they could do as a top up.

However that was boom sort of stuff, I don't think banks do that anymore, it's basically 100% finance for a house.

Not sure they are going to let you borrow to put in a pension either, I doubt they would be in their reasons for borrowing list. Would it not be considered similar to borrowing to buy shares, that didn't work that well for banks/customers when they used to do that either.

Bronte said:

Never heard of remortgaging you boost a pension. How does that work?

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Hi Bronte. I was making more of a theoretical point. I doubt that the banks would allow it. I have edited my post accordingly.

Brendan