which property to mortgage

[larkin]

We own an apartment (outright) worth 400k, and we are buying a house for 600k.

In cash we have 200k, so we need to borrow 400k for the house.

So to get the 400k we need, should we mortgage the apartment, or the new house?

 

[LDFerguson]

It should make no difference in terms of tax relief, so should therefore come down to rate.

If you're looking for a tracker mortgage, you could get 300,000 from National Irish Bank against the new house at ECB + 0.5% using their LTV tracker product, and borrow the remaining 100,000 elsewhere at ECB + 0.95%. Average rate ECB + 0.6125%.

Liam D. Ferguson
www.ferga.com

 

[larkin]

Is the risk the same regardless of which property I mortgage?

If I mortgage the apartment, then I own a house worth 600k.

But if I mortgage the house, I own an apartment worth 400k, and one third of a house?

(Very simplistic I know - we're not speculators just savers and very cautious!)