Brendan Burgess
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so you are borrowing €125k @ 5% , or about 3% after tax to invest in equities, the return on which will be taxed. That is just not a good idea.
As mentioned, I would invest the 125k also.
Yes, just for clarity my recommendation is to remortgage the existing family home mortgage at the best available rate if leverage is what the OP wants, then just invest the full 400k in equities instead which is effectively 50% leverage.Are they not for family homes only?
remortgage the existing family home mortgage at the best available rate
No, I have 200k in cash to start, I borrow 175k to mortgage a new house, using 75k deposit.so you are borrowing €125k @ 5% , or about 3% after tax to invest in equities, the return on which will be taxed. That is just not a good idea.
I suppose the only downside to this approach is that the house we are in is more than likely our "forever home", so if we can never realistically sell it then we'll never realise the gains on this loan so would it worth it to pay this loan off and create leverage for another investment.Yes, just for clarity my recommendation is to remortgage the existing family home mortgage at the best available rate if leverage is what the OP wants, then just invest the full 400k in equities instead which is effectively 50% leverage.
whether a second house needs to be BTL or does the bank really care since we can obviously afford the repayments of ~800e a month
I’m not sure if you’re misunderstanding me Brendan, but I’m just talking about a simple switcher to get a better rate.But neither Avant nor any other mainstream lender will do that.
It's almost as if people come to a forum looking for answers. After lurking for a long time I said, why not call this out: this is an approach I see you, Brendan, take often on this forum, to tell people to stick to their lane. While in one way it's solid advice, it rarely enlightens people. It's the easier approach, but subsequent readers are then left with the same questions that the original posters had. Teach a man to fish and all that.Again, this suggests that you are out of your depth when it comes to financial matters, so you really should not be embarking on risky ventures.
For anybody else who, like me, didn't know what this means...HELOC
If you mean a second mortgage on a property that is already mortgaged then there's little to no chance of any lender agreeing to that.can you take a second mortgage on a house without it being a BTL mortgage?
Putting a value on the expected outcome here would likely clarify thingsso you are borrowing €125k @ 5% , or about 3% after tax to invest in equities, the return on which will be taxed
Yes and no. Some answers don’t require spreadsheets, like over-concentration in a single asset class in a single, very small geographic region is not a good idea!Most of these threads would be resolved with a little bit of work in excel.
I suppose the only downside to this approach is that the house we are in is more than likely our "forever home", so if we can never realistically sell it then we'll never realise the gains on this loan so would it worth it to pay this loan off and create leverage for another investment.
No, but you’ll have an extra 200k worth of equities that has compounded over however many years.I suppose the only downside to this approach is that the house we are in is more than likely our "forever home", so if we can never realistically sell it then we'll never realise the gains on this loan so would it worth it to pay this loan off and create leverage for another investment.
Yes, but some people don't care about that. Let them see the slim returns after interest and tax, and add another point to the list of consSome answers don’t require spreadsheets, like over-concentration in a single asset class in a single, very small geographic region is not a good idea!
It's almost as if people come to a forum looking for answers. After lurking for a long time I said, why not call this out: this is an approach I see you, Brendan, take often on this forum, to tell people to stick to their lane. While in one way it's solid advice, it rarely enlightens people. It's the easier approach, but subsequent readers are then left with the same questions that the original posters had. Teach a man to fish and all that.
But I get the impression that the original poster may be resistant to taking such feedback on board.
To add to this, I appreciate everyone's input and will stick the cash in shares!
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