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Renting and mortgage interest relief

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  • 27-03-2013 12:02am
    #1
    mahoney_j
    Registered Users Posts: 11,203 ✭✭✭✭


    Right heres the scenario myself,Wife and one year old child are currently looking into moving from our 3 bed semi in a midland town and renting a house beside my farm.Selling the house is a non runner as its now worth about 110 k and we paid 235k ad still owe about 180 k.We have a tracker at.75% over ecb.Nothing wrong with where we are staying but its a bit inconvienent living 5 miles from farm.Just wondering if we would loose our int relief on mortgage if we rent our house and rent new place


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    #2
    GetWithIt
    Registered Users Posts: 2,081 ✭✭✭GetWithIt


    I'd be more concerned with losing your tracker. MIR on a mortgage at ECB +.75% is trivial - though I'm sure it doesn't feel that way to you.

    If the bank was to force you off the tracker onto a variable you could see your monthly payments easily double.

    I don't know what the right way to approach the bank and informally inquire as to how they might treat the situation but if there was any possibility of your actions resulting in you losing your tracker I'd do anything I could to avoid that scenario.


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    #3
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    back to the OPs original question. Yes you will lose MIR if you do that.


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    #4
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    D3PO wrote: »
    back to the OPs original question. Yes you will lose MIR if you do that.

    Not to mention being liable for tax on the income, property tax, PRTB registration etc


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    #5
    mahoney_j
    Registered Users Posts: 11,203 ✭✭✭✭mahoney_j


    Thanks for that folks ......i think!! looks like im staying put unfourtnately.Pity though as we should get about 625 a month in rent for our house and rent for other house is down to 725.Would be ok with differential but if int relief is lost and rental income is taxed and ecb rates go up things could get a bit too hairy for my liking.Think were going to try and make overpayements on our mortgage instead of maby 100 a month and hope property markets pick up but i fear our house could fall under 100 k in the next year.Why the hell did i go against my better judgement in 2007 and buy a seriously inflated house.The guy i bought off orignally bought the house of the plans for 88k punts and sold to this sucker and his wife for 235 k.He has since built a fabolous 4 bed house on half an acre direct labour with the proceeds and will get the deeds back from the bank and be mortgage free in june 2014 and all that at only 36


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    #6
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    mahoney_j wrote: »
    Thanks for that folks ......i think!! looks like im staying put unfourtnately.Pity though as we should get about 625 a month in rent for our house and rent for other house is down to 725.Would be ok with differential but if int relief is lost and rental income is taxed and ecb rates go up things could get a bit too hairy for my liking.Think were going to try and make overpayements on our mortgage instead of maby 100 a month and hope property markets pick up but i fear our house could fall under 100 k in the next year.Why the hell did i go against my better judgement in 2007 and buy a seriously inflated house.The guy i bought off orignally bought the house of the plans for 88k punts and sold to this sucker and his wife for 235 k.He has since built a fabolous 4 bed house on half an acre direct labour with the proceeds and will get the deeds back from the bank and be mortgage free in june 2014 and all that at only 36
    Ouch, but do remember that had you not bought then you wouldn't have that tracker! That's an incredible deal you have, so whilst you could have waited and bought a cheaper house, your monthly mortgage would be the same or more. Hope that's some comsolation. If you are looking to overpay I'd lock that €100 in a high interest account, it is a better deal than paying off your mortgage with that tracker.


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