Mortgage top-up for renovations

I was going to arrange an investor mortgage of 150k euro with AIB on an investment property to fund its renovation. However, it has come to my attention that AIB has not passed on the most recent ECB reduction to investors. I was therefore considering the alternative of raising the funds through arranging a top-up on my home mortgage. The home mortgage rate is over 1% lower than the rate AIB offers on its investment mortgages. However, would the interest on the top-up be accepted by revenue as tax deductible against rent? Is there any other downside of taking this approach?

I wouldn't do this unless you were very very comfortable. In the current climate if the hole falls out of everything you need to safe gaurd your home above all else. What if you lost your job/business and the This post will be deleted if not edited to remove bad language fell from the rental market. Let the banks have your rental properties but keep your house out of the line of fire.
I'm not too sure where you stand on the tax side though.

PADDYBOY99 said:

I wouldn't do this unless you were very very comfortable. In the current climate if the hole falls out of everything you need to safe gaurd your home above all else. What if you lost your job/business and the This post will be deleted if not edited to remove bad language fell from the rental market. Let the banks have your rental properties but keep your house out of the line of fire.
I'm not too sure where you stand on the tax side though.

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The banks in this scenario will take both the rental and home property. Check the terms and conditions, it's in the small print.
OP you'd presumable have to tell the bank what you wanted the loan for and they may not let you have it at the lower rate. Try another lender, see what they say and then maybe negotiate with your current lender.

houseclearou said:

would the interest on the top-up be accepted by revenue as tax deductible against rent?

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Nope, AFAIK, as top up is against your PPR.

The interest on the top-up would be accepted by revenue as tax deductible against rent if the top-up is to fund an investment property.

Many thanks for the various replies. I have spoken to a number of people offline and the consensus is that it is a grey area. Revenue should accept the interest on the mortgage top up on the primary residence as tax deductible - as it would be raised for investment purposes. However, it is unclear what one would need to provide to revenue in order to justify that if was used for investment purposes. On another point, the bank do not seem to be too concerned with what the money is to be used for or whether the loan is raised against the primary or investment property.