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What stress test rate do AIB measure new mortgages at ?

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  • 13-07-2012 10:01pm
    #1
    Rebel1977
    Registered Users Posts: 802 ✭✭✭


    I have a meeting with AIB next week about a new mortgage application. I know they and other banks carry out stress test on the proposed mortgage payment but what level is it at ? What is the stress test rate ?

    Do you know if AIB take rental income into consideration or does it depend where the property is located ?


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    #2
    NIMAN
    Registered Users Posts: 33,589 ✭✭✭✭NIMAN


    I got a mortgage off them nearly 2 yrs ago and I remember 5% being mentioned, now I don't know for sure if that was :

    - Interest rates going to 5%
    - Rates increasing by 5%.

    tbh, think it was the latter. Which would have been approx 8%.


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    #3
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Rebel1977 wrote: »
    I have a meeting with AIB next week about a new mortgage application. I know they and other banks carry out stress test on the proposed mortgage payment but what level is it at ? What is the stress test rate ?

    Do you know if AIB take rental income into consideration or does it depend where the property is located ?

    They stress test @ 6% over the term available to you up to age 65 at expiry.

    Rental income is factored in some case but it depends on your circumstances. Is it an existing PDH which will become an investment property or is it an existing rented property?


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    #4
    Rebel1977
    Registered Users Posts: 802 ✭✭✭Rebel1977


    killers1 wrote: »
    They stress test @ 6% over the term available to you up to age 65 at expiry.

    Rental income is factored in some case but it depends on your circumstances. Is it an existing PDH which will become an investment property or is it an existing rented property?

    I have my own house, we are looking to buy out own place but thinking of renting my house as the income would be handy and rent just about covers the mortgage. I was told that AIB wont take rental income into consideration as my house is not in a primary rental area, which could affect mortgage chances.


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    #5
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Rebel1977 wrote: »
    killers1 wrote: »
    They stress test @ 6% over the term available to you up to age 65 at expiry.

    Rental income is factored in some case but it depends on your circumstances. Is it an existing PDH which will become an investment property or is it an existing rented property?

    I have my own house, we are looking to buy out own place but thinking of renting my house as the income would be handy and rent just about covers the mortgage. I was told that AIB wont take rental income into consideration as my house is not in a primary rental area, which could affect mortgage chances.

    They will stress test the mortgage amount o/s on your current property @ 6.4% over a max term of 25 yrs or less if you're aged over 40. They only take the proposed rental income into account for a PDH becoming an investment property where the LTV is less than 50%. They also take into account the location of the property and the likelihood of it renting. Unless your ltv is less than 50% the proposed rental income won't be included and you'll need a sufficient income to cover the stressed repayments on both mortgages and a proven repayment capacity for both and still have sufficient disposable income left over to cover their minimum requirements I.e €2k for a couple and +€250 for any additional dependent.


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