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My calculations:
If interest rates are 7% and we assume minimum mortgage will be £100,000…
It means the minimum property price in order to get the £100,000 mortgage must be
– £135,000
– 7.1% yield
– 75% Loan to value
– Cash investment: £40,310
But in reality, the yields won’t be that high. And therefore people will have to go for a lower loan to value in order to break even.
Running some numbers, and assuming normal yields, the breakeven deal would be:
– £170,000
– 5.6% yield
– 60% loan to value
– Cash investment: £75,960
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If interest rates are 7% and we assume minimum mortgage will be £75,000…
It means the minimum property price in order to get the £75,000 mortgage must be
– £100,000
– 7.1% yield
– 75% Loan to value
– Cash investment: £30,450
