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Interest Only

Interest Only
As a buy to let investor, your main goal is to produce a rental income and not necessarily to own your property/ies outright (another goal is that during the period you are renting the property out the value will also hopefully have risen and when you come to sell it you have not only made rental income but will also benefit from a higher resale value).

For the main goal of producing rental income, the majority of buy to let mortgages are interest-only loans, which has two main benefits:

1 The monthly payment is much lower. This makes it easier for you to meet the stringent borrowing rules.

2 It is also tax efficient because you can deduct the interest part of your mortgage payment from your rental income before you pay tax on it.

However, it should be noted that this perk does not apply to the repayment element of mortgage payments.

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 Subsections of this guide:

•  So what is buy to let?

•  Borrowing Limits

•  Interest Only

•  Gearing

•  Is Buy To Let Worth It?



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