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Move mortgage from one house to another

  • 19-03-2017 3:23am
    #1
    Ron75
    Registered Users Posts: 42 ✭


    Hi, we live in our family home with a remaining mortgage of about 150k on it. Through family we got another house without any mortgage on it which is rented out. Similar houses in that area are currently selling between 280-300k.

    Would it be possible to get a mortgage on the 2nd house to pay off the mortgage of our family home?
    The idea behind is that we could
    a) get a better mortgage deal
    b) reduce the tax on the rental income
    c) (maybe) use some of the funds as deposit for another house as BTL

    We spoke with an financial advisor last year who stated that the mortgage on the 2nd house could only be used on the same house, but not another. Is that true?


Comments

  • #2
    phormium
    Registered Users, Registered Users 2 Posts: 3,345 ✭✭✭phormium


    Your point 2 will not work, if you borrow on the 2nd house to pay off the family home mortgage (if you could get such a mortgage) then it will not be allowable for tax against the rented property anyway. It is the purpose the funds are used for that determines whether they are eligible for relief against rental tax, if not used on that or another rental property then no tax relief.

    There would not be much point to borrowing against the rented one to buy another rented one, why not just borrow on the new one being bought unless you need to borrow on both, as in borrow against one for the deposit to fund the mortgage on the new one, don't think banks are doing this sort of 100% finance anymore.

    If there is a better rate available than on your family home mortgage why not just switch to a lender with the better rate, it's unlikely you will get the best rate remortgaging a rented property than you would on a family home.

    What your financial advisor meant is that banks are unlikely to lend in the way you want, there is no legal or other reason why you can't use funds borrowed on one house for another, it's just banks don't like that sort of non straightforward lending anymore.


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