sajad torkamani

Rental income – interest payment = surplus cash

With a buy-to-let mortgage, you only pay the interest on the loan and that interest should be much lower than the amount you can earn from renting the property. So you’ll get some surplus cash (maybe a few hundred pounds a month).

But won’t I still have the debt to pay at the end?

Even though at the end of the mortgage term, you’ll still owe the amount you initially borrowed, you can sell the house to pay the loan back. The house sale should cover the loan in most cases. It’s also possible that the house price will have risen since out the loan so that you can sell the house to pay off the loan and keep the extra surplus!

Another option is to keep remortgage to extend the mortgage repayment date so that in practice you never really pay back the mortgage for decades or generations (your children can inherit it).

Conclusion: Buy-to-let mortgages give you surplus cash flow each month

In practice, buy-to-let is used to generate cash flow each month.

Tagged: Mortgages

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