New to Buy-to-Let

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abs

Posts: 2
Joined: 19/7/2007

New to Buy-to-Let

Hello all,

I am new to this buy-to-let idea, so i apologise for any stupid questions! :)

I have just seen a unbelievable rate of 4.89% which is fixed until 31.10.09! So, for example, if i buy a £200,000 property does the rate of 4.89% mean that i will pay back 4.89% of the £200,000 every year until my term is finished which could be 15 years.

Thanks all

Report Abuse | Date 19/7/2007 9:35:40 PM

abs

Posts: 2
Joined: 19/7/2007

RE: New to Buy-to-Let (in reply to abs)

Just to add to this how are monthly mortages calculated repayment. I asked because i have just used a mortgage calculator online and they have worked out this:

To borrow £100,000.00 over a term of 15 years at a monthly calculated interest rate of 4.89% gives: Repayment Mortgage Monthly Repayment £785.08 and Interest Only Monthly Repayment
£407.50

Report Abuse | Date 19/7/2007 9:59:56 PM

radsysltd

Posts: 7
Joined: 24/7/2007

RE: New to Buy-to-Let (in reply to abs)

Hi abs

Its more complicated than this: interest is normally calculated every day based on the amount of capital still outstanding on the mortgage, so as the mortgage approaches its end you would, assuming no interest rate changes (which is impossible), you would be making the same monthly mortgage payments but less of it would be going to pay the interest ont he mortgage and more on paying off the capital.

Kind Regards

Charles

http://www.best4property.co.uk
the property resource and news directory

Report Abuse | Date 24/7/2007 9:26:36 PM