Investment Property Modelling - is my maths right?

[tri82star]

Hi everyone,

I've put together a spreadsheet to look at 3 scenarios related to a UK investment property I have. It's the 1st two scenarios that are leaving me thinking that I've got something wrong!

I'm looking at my net position in 10 years time - comparing continuing to pay interest only versus repaying capital and interest. At the end of 10 years I would hope to sell the property...

Looking at repayment (interest V capital),all outgoings and income for the period - it appears that I'd only be 22,000 better off for making capital repayments - despite having to come up with more than 100,000 (additional) for the mortgage lender during that time!

Does anyone know a website or verified spreadsheet to assist with this modelling to make sure I make the right decision? Look forward to hearing from you.

Basic numbers below
Mortgage outstanding 125,000
Interest rate 3.99% (interest only 412 per month capital 1,250 per month)
Rental income 6,300
Annual outgoings 2,400

TIA!

 

[nmb]

Your figures look broadly correct but there are some issues to bear in mind including: –

Relatively low mortgage rates at the moment

The likelihood that mortgage rates will increase over the next 10 years

While £22,000 may not seem much of a saving in the overall scheme of things, with capital repayments you are reducing your debt as well as covering the interest charge. Using an interest rate of 3.99% surely the greater risk must be on the upside?