Start paying off BTL house or load pension
- Thread starter Middleoftheroad
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OP really needs to get professional advice on this!!!
Maybe I'm completely missing something here but this seems to have gotten sidetracked into the merits of a one off BTL
OP is seriously over borrowed on both properties and does not have the funds to pay for both. Loan to income (salary) is >8
There is no sign of saving history (no cash, very small pension , very little equity in properties). IF BTL has been interest only for 10 years, then where has the €50k profit dissipated to?
Cost of changing tenants at least twice in next 10 years, renovations needed, cost of sale means that future rental ''profit'' is totally dependent on house prices
What other living expenses does the OP have? what about cars?
Even with some +/- on the numbers below, I don't see how any of this works unless OP continues into retirement with huge debt
Maybe I'm completely missing something here but this seems to have gotten sidetracked into the merits of a one off BTL
OP is seriously over borrowed on both properties and does not have the funds to pay for both. Loan to income (salary) is >8
There is no sign of saving history (no cash, very small pension , very little equity in properties). IF BTL has been interest only for 10 years, then where has the €50k profit dissipated to?
Cost of changing tenants at least twice in next 10 years, renovations needed, cost of sale means that future rental ''profit'' is totally dependent on house prices
What other living expenses does the OP have? what about cars?
Even with some +/- on the numbers below, I don't see how any of this works unless OP continues into retirement with huge debt
| Net Income | Annual | Monthly | |
| Salary (53k+36k) (Tax calc inc health BIK and current pension) | € 66,000 | € 5,500 | |
| Rent a room | € 10,000 | € 833 | |
| BTL | € 5,000 | € 417 | |
| Total | € 81,000 | € 6,750 | |
| Mortgage expense (karls mortgage) | Annual | Monthly | |
| Mortgage BTL (10yr) | € (34,416) | € (2,868) | |
| Mortgage PPR (10yr) | € (45,312) | € (3,776) | |
| Mortgage PPR (15yr) | € (30,996) | € (2,583) | |
| Mortgage PPR (20yr) | € (23,844) | € (1,987) | Not an option, OP will be 70! |
| BTL 10yr + PPR 10yr | € (79,728) | € (6,644) | |
| BTL 10yr + PPR 15yr | € (65,412) | € (5,451) | |
| Leftover for all other expenses (for next 10 yrs) | Annual | Monthly | |
| 10 year plan | € 1,272 | € 106 | |
| 15 year plan | € 15,588 | € 1,299 |
Brendan Burgess
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Hi OKGO
Welcome to Askaboutmoney. That is a very helpful detailed analysis.
I was responding to the question asked.
I got the impression from the following , that after they have increased the payment on the Buy to Let to Capital and Interest, then they will have €1,200 extra.
But your figures show that either I have misunderstood the OP or that the information is incomplete.
If they can't afford the repayments, then there is no question. The property must be sold whether it is profitable or not.
Brendan
Welcome to Askaboutmoney. That is a very helpful detailed analysis.
I was responding to the question asked.
I got the impression from the following , that after they have increased the payment on the Buy to Let to Capital and Interest, then they will have €1,200 extra.
But your figures show that either I have misunderstood the OP or that the information is incomplete.
If they can't afford the repayments, then there is no question. The property must be sold whether it is profitable or not.
Brendan
Hi Brendan
Glad to join, have read and learned a lot from this valuable site
I think you are absolutely correct in relation to the OP's question. And for someone with a healthier equity and less risky position then it should be a no brainer to hold on to it.
But if the OP want's to retire at 65 with both properties, I'm struggling to see how they can make it work and meet all the capital payments. I think the only way the BTL benefits the OP is if they can negotiate another interest only period to give some buffer to plan the sale
Again just my opinion but I think professional advice needs to be sought to best plan a happy retirement for OP
Glad to join, have read and learned a lot from this valuable site
I think you are absolutely correct in relation to the OP's question. And for someone with a healthier equity and less risky position then it should be a no brainer to hold on to it.
But if the OP want's to retire at 65 with both properties, I'm struggling to see how they can make it work and meet all the capital payments. I think the only way the BTL benefits the OP is if they can negotiate another interest only period to give some buffer to plan the sale
Again just my opinion but I think professional advice needs to be sought to best plan a happy retirement for OP
Figures above seem to be off
That all would create about 1.5k per month more cashflow than above.
7k additional income not included
Only 10k modeled
This is not included (granted starts in 2022)
The cashflow cost of ppr is much lower than modelled
That all would create about 1.5k per month more cashflow than above.
Last edited:
Not off, just realistic to highlight the issues. OP is 'due' an increase. If it is guaranteed, then great it is another €3.5k net to add above
OP's range was 10-14k. Maybe they don't get to max it every year depending on timing of interns. And as they said, none at the moment because of current climate. They also need to commit to doing this every year for the next 15 years and beyond to rely on. They don't have the luxury of stopping this. +4k if they can guarantee it
If these were granted at no cost to OP and vest tax free, then add to the above figure. If it is a typical ESPP, then OP is currently contributing so the net gain from 2022 onward is probably more like 1-2k, and dependent on share price
+6k or +1k/2k
If OP has any chance of retiring at 65, they need to clear the PPR in 15 years. It might make cashflow look good now but how do they fund it at 66-70 when there is not much in the way of pension currently in place
Either way, OP has outstanding debt of 738k on a net income somewhere in the range of 66-76k. If they have only built up ~150k equity in last 10-15yrs, how will they clear 738k equity in the next 10-15 yrs. There are also 2 kids who may or may not go for third level education. Only OP knows these answers and its why I suggest again that they need real professional advice to really plan their finances