12:16 PM, 24th November 2013, About 8 years ago 15
Scenario: I rent a terraced property, may consider selling in future, currently I overpay on mortgage to reduce the amount owed.
I was told that having a mortgage on a property wasn’t actually a bad thing as I would save on capital gains tax as the mortgage would have to be paid off first before capital gains was charged.
On this first point, would I be right to think that you can reduce the amount of capital gains tax charged if an outstanding loan (mortgage) was still outstanding?
I am looking for any hints or tips to help manage my investment better for maximum return.
Currently I pay over the normal mortgage repayment to reduce my mortgage a lot quicker (no fees for over-payments), but I don’t know if in the long run I am penalising myself by doing this. The interest repayment on this property is only actually £75 per month as there is only 14k left to pay.
I do not pay any tax on the property as it is still minus £12,000 due to refurbishment so this will have to run down and move into the green before I pay tax.
My question is, would you advise me to stop overpaying the mortgage and just pay what is required therefore I will reap more of the benefit of having a rental property?
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