Dear Property Doctor,

What’s the best buy to let mortgage to go for on a buy2let – capital and repayment or interest only? I’ve asked a few friends who have properties but everyone seems to have a different opinion. I just wondered what you have on yours?

Most professional buy to let landlords choose to go interest only. The main reason for this is cash flow. If you were paying a proportion each month to repay the capital then obviously the monthly amount you would need to find to pay the mortgage would be higher.

The amount paid as interest each month can also deducted against tax – the capital portion cannot.

Some landlords who may have a small mortgage may opt to repay the capital over the course of the loan.

It is hoped that say after 20 years the property would have increased sufficiently in price to repay the mortgage PLUS make a tidy capital gain.

The drawback of interest only is obviously that the loan is never repaid – you would either have to sell the property or have another repayment mechanism to pay off the debt at the end of the term OR remortgage to a different lender.