Mortgage Advice for Holiday Home

[Mountrice]

Am interested in any advice your may have for the following situation : we are a married couple in our mid thirties with net income of €7,500 per month. We are 7 years into a 25 year mortgage of €120,000 which we recently locked into a 10 year fixed rate. Current value of our home is in excess of €300,000. After mortgage repayment of €650 per month and other expenses we have €3,000 surplus income over expenses each month. We have savings of €15,000 and SSIA account due to mature next April. We are looking to buy holiday home and have decided on a budget of $200,000. The holiday home would primarily be for our own use and family and friends but would also have rental potential during summer months. We are looking for advise with regard to the type of mortgage we should use.

 

[doberden]

I would get a separate mortgage for the holiday home and then write off any rental income against mortgage interest, repairs, general expenses etc. You just have to make sure to negotiate a good interest rate with the bank to ensure they don't try a charge you a higher rate as it's an investment property. They'll all negotiate on this.

 

[WizardDr]

Hold on..
be careful if you use and also rent out the holiday home. If its purely investment without being used yourself then doberden is correct. If there is a large element of self enjoyment, cant see that you could deduct all or much of the expenses.