How to remortgage/consolidate 2 mortgages

J

JulyBaby

Guest
My wife and I have 2 mortgages. One for her house before we married and one for mine. My wife's house is now rented out. Details as follows:
First House (home):- estimated value =€500K, mortgage = €250K
Rented House: - estimated value =€400K, mortgage = €150K
We have 2 separate mortgages. Does anyone have any advice for consolidating or re-structuring the mortgages to reduce tax on the rental income (and any other advantages..)

 
You can only offset interest on monies used to buy, improve or renovate an investment property against the rental income so you can't boost the mortgage on the let house for this purpose. The mortgage on your main residence should be attracting the maximum TRS. Who are the mortgages with and what interest rates are you paying on each one?

Sarah

www.rea.ie
 
Hi Sarah,

In a similar predicament to the OP.

What if OP had released say 100k of equity against current home to pay for investment property. Could he/she reduce the mortgage on the family home and increase it against the rental home by 100k to make the family home more secure or is this just a pointless exercise? Will tax relief remain the same?
 
Unless the interest rate on the investment is significantly higher than on the residence (which it shouldn't be) then there's no real point switching for the sake of it. In your case I presume you are offsetting the interest on the €100k secured on your home against the rental income to reduce your tax? You cn do this regardless of the actual security for the loan as long as you can prove it was borrowed to purchase the investment.

Sarah

www.rea.ie
 
Home mortgage is with EBS rate 4.0 APR
Rental house is with IIB rate 4.28 APR
 
You could remortgage your residence under Ulster Bank's fees free switcher to a rate of 3.7% (ECB + 0.95% for the life of the mortgage) or Bank of Scotland's ECB + 1% with a 2 year 0.55% discount and €1000 towards switching costs (this would cover most, if not all, of the costs). On the investment property First Active would be cheaper at 3.9% (ECB + 1.15%) but there are no fees free deals on investment properties.

Sarah

www.rea.ie
 
Or if you wanted even cheaper try the rate I'm on with NIB, ecb + 0.79% ( in saying that I'm moving to fixed this month @ 4.18%) we got €600 towards legal costs when we switched in from old lender last yr.
 
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