Can I top-up mortgage on one house to pay for upgrades to another...

M

murphaph

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.......and still claim TRS on the whole lot? (I think I know the answer)

The story is that I need about 30k to upgrade a 1970's house belonging to my mother and with nothing owing on it. I have a lot of equity in my house and could borrow easily and relatively cheaply.

We will investigate her simply borrowing the 30k herself or with me as guarantor but she is 65 and has a 20k loan with the credit union. Her house is worth c.350k. I don't think the bank will let her borrow in her own right at her age but who knows. Even if they do, I'd imagine she'd be paying a hefty mortgage protection premium at age 65?

Easier and cheaper for me to borrow?

Apologies for the myriad of questions lately. Things are very complicated.
 
You won't be able to claim TRS on the top-up portion of your mortgage.

I think top-ups can be used for any purpose.
 
You can only claim owner occupier mortgage interest relief on interest on loans/topups used to purchase or renovate your own home.

Not sure if there is any exemption/allowance for borrowing to make essential (?) repairs to, say, a parent's home?
 
Hmmmm, thanks guys. I couldn't say the repairs are essential...just needs total remodelling. Ah well, I knew my chances were slim.
 
If your mother is otherwise exempt from income tax then perhaps a covenant might be an option or a help?

[broken link removed]
 
No, she still works and earns in excess of the 19k income tax exemption limit for widowers aged 65 and up so is a covenant no use to us?

(forgive a stupid question....who would be the covenantor/covenantee anyway? I've always been curious about these covenants you hear about!)
 
Covenantor is the donor.
Covenantee is the recipient.
Covenants are much more restricted in recent years than in previous years. It used to be possible to, say, covenant to one's (non incapacitated) nephews and nieces for example.
 
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