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Mortgage rate for libing in vs renting out?

  • 21-06-2018 3:22pm
    #1
    Zascar
    Moderators, Motoring & Transport Moderators, Music Moderators Posts: 12,778 Mod ✭✭✭✭


    I have a very small property I bought years ago and rented out. I'm on a current rate of 4.3% and I asked if I can get any better - they said no because I dont live there. I asked what could I get if I did live in it, and they said 2.6%. Wow, thats a massive difference. The bank I'm with for my current account are looking for my business and I'm going to see what they can do for me. Why is there such a big difference and cant I just get a normal mortgage rate?


Comments

  • #2
    Liam D Ferguson
    Registered Users, Registered Users 2 Posts: 542 ✭✭✭Liam D Ferguson


    Default risk. If you have two properties and two mortgages - one is your home and the other is an investment / rental property, and you run into financial difficulty so that you can only pay one mortgage, which one will you pay? For most people, they will work harder to pay the mortgage for their own home to keep a roof over their heads. So an investment property will always be seen as a higher risk than an owner-occupied home.


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