buy to let

[nextqueen]

is a buy to let mortgage classed as an endowment or a repayment mortgage?

[ubasses]

either interest only or capital repayment

[PipinHull]

Surely it would depend whether you took out an endowment or repayment mortgage? Buy-to-let could be either, just as with a normal mortgage.

[nextqueen]

a buy to let was taken out, payments are made but the value never goes down, only up slightly with interest being added on. i thought you had to have this kind in order to buy a buy to let and put down a hefty deposit. so do you think this is an endowment, an extra sum isnt paid into a policy aswell as the mortgage, i dont understand it.

[boxtops]

with a repayment mortgage you are paying for the interest as well at the capital from the outset - the endowment version means that you are paying for an insurance policy and interest, and hoping to repay the capital from the value of the policy when it matures. with a repayment, when you get the annual statement, you see the value of the loan going down each year. if yours doesn't then it sounds like an endowment, but you would have a life assurance endowment policy to go with it, you would have had a copy of that.

[nextqueen]

there isnt a life insurance policy with it. yes i understand this to be an endowment if this exists but it doesnt. the repayments as i say dont take down the amount borrowed so really dont understand which type it is, just a buy to let mortgage to me but need to know as intention is to sell the buy to let.

[ubasses]

If your balance never decreases it sounds like you have interest only. At the end of the mortgage term you have to have a way of paying off the capital which is often an endowment. How long haave you had the mortgage if it is early days there will be very little reduction as you are paying of mainly interest. Check the mortgage documents they should make it clear. A lot of Buy to let landlords pay interest only with a view to property prices going up, selling the property and keeping the profit.

[sandyRoe]

Could it be an interest only mortgage? You pay the interest, as the name suggests, and the loan is repaid when the property is sold.

[dzug2]

It could be any of repayment, endowment or interest only depending on what you took out. From your description it sounds like interest only, but only you know what you signed up for.

Though it sounds like you don't :))

[factor-fiction]

As it sounds like an interest only mortgage you need to start planning for for how you are eventually going to repay the capital sum which presumably will be a significant sum. You either need to start saving large amounts, making overpayments (if the mortgage allows for this) or switching to a repayment.

[CovKid]

If you are planning to sell it doesn't matter. When you sell you will have to pay off the balance on the mortgage...an amount of money...from the sale proceeds....another amount of money. It doesn't matter waht they called it.

Is it possible you have some kind of east start mortgage? You pay relatively small amounts early on and the interest is rolled up? Later the payments increase. It is "meant" to help people buy property...but usually helps sell motgages and earn commission for the broker.