Title updated- hopefully clearer.
Couple currently renting in Kilkenny. €1.1k per month.
Plan to move to Cork for buy our forever home within 4 years. Most likely scenario is 3 years but could be as low as 1.5 years. Career dependent and out of our hands.
There is a property for sale in the same estate that we rent in. On sale for €300k. If we buy, we would want to keep the property and rent it out after we eventually move back to Cork. We should be able to achieve €1.3k rent (before tax) on this property.
We are trying to establish:
Couple currently renting in Kilkenny. €1.1k per month.
Plan to move to Cork for buy our forever home within 4 years. Most likely scenario is 3 years but could be as low as 1.5 years. Career dependent and out of our hands.
There is a property for sale in the same estate that we rent in. On sale for €300k. If we buy, we would want to keep the property and rent it out after we eventually move back to Cork. We should be able to achieve €1.3k rent (before tax) on this property.
We are trying to establish:
- Should we continue renting or buy given we uncertainty on timelines and fact that we know we will not be here longer than four years?
- If we buy, how much of our cash deposit should we use?
- If we buy, what are the implications on getting a second mortgage for our forever home? Are we shooting ourselves in the foot?
- Combined Salary: €170k
- Savings: €120k (all cash)
- Savings per month: €2.5k
- Rent per month: €1.1k
- First property price: €300k
- Forever Home property price: €600k
- Assumed mortgage rate and periods: 2.45% & 30 years
- We have seperate pension savings.
Option 1 (Rent) | Option 2 (Buy) | |
Initial Time Period | 2 Years | 2 Years |
Opening Savings | €120,000 | €120,000 |
less deposit | €0 | -€60,000 |
plus additional Savings | €60,000 | €60,000 |
Closing Savings | €180,000 | €120,000 |
Rent Paid | €26,400 | €0 |
First Home Price | €300,000 | |
less deposit | -€60,000 | |
Borrowing over 30 years | €240,000 | |
Interest Accrued | €11,625 | |
Payments made (€949 p/m) | -€22,781 | |
Loan Balance after 2 years | €228,844 | |
Forever Home Price | €600,000 | €600,000 |
less deposit | -€180,000 | -€120,000 |
Borrowing over 30 years | €420,000 | €480,000 |
Interest Paid over 30 years | €164,584 | €188,096 |