61 Palatine Road, Wallasey, CH44 7EN - £125,000 https://www.rightmove.co.uk/properties/143062991#/media?id=media0&ref=photoCollage&channel=RES_BUY This property comes tenanted for £850 PCM ON A 5 YEAR FIXED GURANTEED RENT SCHEME Lets brakedown the numbers asign a Wealth Creation Strategy 1. Property Purchase and Initial Costs: - Property Price:£125,000 - Deposit (25%): £31,250 - Mortgage Loan Amount: £93,750 - Stamp Duty: - If this is an additional property: £3,750 (3% of £125,000) - If this is your main residence, no stamp duty is payable. 2. Monthly Cash Flow: - Rental Income: £850 per month - Mortgage Payment: £547 per month (assuming a 5% interest rate over NEXT 5 YEARS FIXED - Monthly Rental Profit: £303 3. Overpayment Strategy: You plan to use the entire monthly rental profit (£303) to overpay the mortgage. This increases your total monthly mortgage payment from £547 to £850. 4. Impact of Overpayments Over the Next 5 Years: - Total Overpayment Per Month:** £303 - Total Overpayment Per Year:** £303 x 12 = **£3,636 - Total Overpayment Over 5 Years:** £3,636 x 5 = **£18,180 By overpaying £303 each month, you will reduce the principal balance of the mortgage more quickly, leading to substantial interest savings and shortening the loan term. Estimated Reduction in Mortgage Term: - Without overpayment, the mortgage would last 25 years. - With the overpayments, you could reduce the term by approximately 11-12 years, but since you are focusing on the first 5 years: - You will reduce the term by about 2-3 years within the first 5 years. Estimated Mortgage Balance After 5 Years: - Without overpayments: The balance might be around **£84,000**. - With overpayments: The balance could be reduced to around **£65,000-£70,000** depending on how much interest is saved. 5. Equity Growth Over 5 Years: Assume property value increases by 10% each year: - Year 1:** £125,000 * 1.10 = £137,500