Paying off mortgage on investment property?

B

Babywise

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I have received a lump sum payment which would enable me to pay off a mortgage (EUR50k) on an investment property. In view of the fact I get mortgage interest relief on my investment property, is this the best course of action or should I use this money instead to pay down some of my mortgage on my current home? Also I do not intend working for the remainder of this year or next year so will I still have a tax liability on the income I am earning on the property if this is my only source of income for the forseeable future. The rental income is circa EUR10k per annum.
 
Babywise said:
is this the best course of action or should I use this money instead to pay down some of my mortgage on my current home?
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Probably the latter.

Also:

Interest only mortgage for investment property
You would need to crunch the numbers so to see what the best course of action is. How are you going to manage to live and pay two mortgages on €10K p.a.?

If you stop working mid year then you may be entitled to claim some tax back.

Form P50 - First Claim for Repayment During Unemployment
 
Thanks Clubman. My husband will look after the mortgage repayments on our home and the rental income covers the mortgage on the investment property. From the attachments it looks like it does not make sense to repay the mortgage on the investment property, however as I will not be earning for the forseeable future apart from maternity benefit for the next number of months, presumably the tax I will pay on the rental property will be at the lower rate and so there will be less offset opportunity for the interest against the rental income? Also the main purpose of paying off the mortgage would be so I would generate a small income from the rental payments. Does this make the situation any clearer as to the best course of action?
Thanks
 
Brendan said:
You are always better off paying the lump-sum off the mortgage on your home.

Brendan
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Hi Brendan, just wondering why is this? that its better to pay down the PPR mortgage over the investment one? am in a similar situation and was paying down the investment one.
 
It's discussed at length elsewhere.

You get tax relief on the interest paid on your investment mortgage at your top rate.

The tax relief on your home mortgage, is tiny.

Brendan
 
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