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  • Mortgages & Finance

    What mortgage deal would you choose?

    Hi. One of my properties are due to be fixed back in on around 2 months. Looking to remortgage (interest only) with TMW on a 5 year fixed and the following deals are available, I know which one I'm going to choose but I was wondering what deal all you would go for.

    Rent for this property is £500

    Deal one 

    2.1%

    £121 per month

    £1995 arrangement fee

    Deal two 

    2.59%

    £159 per month

    £995 arrangement fee

    Deal three 

    3.19%

    £181 per month

    £0 arrangement fee

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    Deal 1 works out at a total of £154.25 per month over the 5 year period

    Deal 2 =  £175.58

    Deal 3 = £181

    So deal 1 is the best value.

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    Also, the arrangement fee is tax deductible and the interest is not. So deal 1 wins on all accounts!

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    That’s not correct, Section 24 states that incidental costs of obtaining the loan are also not deductible, the arrangement fee would be caught by this.

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    You haven't said what your current LTV is.

    Lets assume it's 75LTV and that you have a 25% equity, if you think that your property value might increase by at least £8000 (£1995 x 4  (multiplier of 4 because we assumed 25% equity)) over the next 5 years, then go for deal one and add the arrangement fee onto the loan.

    The £8000 calculation is just so that you don't have to topup your mortgage in 5 years time if you still want the same 75LTV deals. Also, I assumed your mortgage at 25% equity, if you have 40% equity then use multiplier of 2.5 i.e. whatever it  takes to make the equity into 100%.

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    Deal 1 ( if you are expanding your portfolio )

    I used to always max my  leverage by taking the lower rate and adding  the fee on

    And use the £3600 saved over 5 years  to spend on say a new kitchen & bathroom after 4.5 yrs

    That adds  value of double to say £7,200 for when you remortgage after 5 years

    Then over time  if you had a portfolio of say 20 and did Deal 1 on all and saved the extra cash......

    You can  then  after  2 years  put 25% down on a 100K property

    So you get in effect a free house free CG and free rental income on that house by choosing Deal 1

    Compound everything you can  and time will do the rest

    Think  big

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    Jonathan Clarke. http://www.buytoletmk.com

    Good Morning,

    Lots of information to consider when obtaining a mortgage such as personal circumstances, the property itself, LTV of the mortgage, your strategy, other properties you own, whether you are a portfolio landlord or not ? The list goes on. 

    If you want to see what the market can offer you then please get in touch and see where we can help.

    Currently I can see a 60% LTV deal at 2.29% with no arrangement fee, free valuation and free legals.

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    You can contact me via Direct Message, or 07788 219647 or call the team on 01206 654444 for personalised quote and advice


    The £0 fee products are always attractive but once you get to to know them. They are not as good.

    Deal 1 - The 2.1% (well 2.09%) mortgage as the true cost over the 5 year period is lower.
    Even if have to pocket a fee, works out better over 5 years.

    You seem to be looking at 65% LTV BTL range. If we expand to the whole of the market. Then I would not go for Deal 1 then as there is a better like-for-like mortgage available.

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    The above post is not financial advice, its often me rambling - passing time on a coffee break.
    If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance.


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