2nd Property Purchase

O

OnLooker

Registered User
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I currently have a property valued at €450k. The house is rented out & basically covers the mortgage. The property is registered with the prtb.
I earn 40k a year & have 20k available to use.

I am looking into buying a second property to move into as I want to keep renting out the 1st property. I am wondering how much of a mortgage I would be offered by the banks.

Also, would I be eligble for Mortgage Interest Relief on the 2nd property if I moved into the 2nd property??

Thanks in advance.
 
In relation to your second qustion ...

You are entitled for mortgage interest relief on any loan used to buy your PPR (Principal Private Residence). Note that you are not entitled to this on an investment property although you can offset interest against rental income.
 
If the house is covering itself on a 10/12 tenancy (i.e. allowing for 2 months vacancy in a year) and you have no other loans you qualify for circa €210,000 as a 92% mortgage over a 35 year term and including room rental.

Sarah

www.rea.ie
 
Sarah W said:
If the house is covering itself on a 10/12 tenancy (i.e. allowing for 2 months vacancy in a year) and you have no other loans you qualify for circa €210,000 as a 92% mortgage over a 35 year term and including room rental.

Sarah

www.rea.ie
Click to expand...

I intend to live in the second property not rent it out. Would I not get more than €210k considering I have colateral of €450k??
 
depends on how much of a mortgage you have left on the "rented out" property
 
OnLooker said:
I intend to live in the second property not rent it out. Would I not get more than €210k considering I have colateral of €450k??
Click to expand...

Lenders work out your maximum based on your income, not your equity (as the only way they could get their hands on that would be to repossess one or both properties). If there is an excess of rental income on your existing propery then yes, lenders will take this into account. Your best bet would be to make a formal application for approval in principle so that your full circumstances could be considered.

Sarah

www.rea.ie
 
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