Mortgage Advice

The_Fitz

Hi Folks,

Myself and my partner are in the process of moving home to Ireland early next year from England.

We currently own our own house in England and are debating whether or not to sell it. We applied to our provider for Consent to Let but were rejected due to the type of mortgage we have, and would need to wait until September 2019 before we could rent it out. To sell it would mean having to pay a large fee to get out of our mortgage product (about £6k).

The other choice would be to leave it empty for around 6 months while paying the mortgage (and renting in Dublin) with the chance to rent it out in September.

We would eventually (after a year or two) look to purchase a property in Dublin but not sure whether owning a property overseas will affect us.

Does anyone have any pointers that could help?

Cheers,

Fitz

Liam D Ferguson

If you're applying for a mortgage in Ireland, any existing loans and mortgages will be taken into account. Most lenders will "stress-test" the UK property - they will discount the amount of rent you're receiving to allow for tax and/or void periods etc., and they will add a few percent on to the interest rate to allow for possible future interest rate rises.

So the rent you're receiving would need to be substantially greater than the mortgage repayment for the UK property to be considered to be "washing its own face". If not, then any shortfall will be taken into account in the assessment of what level of mortgage you qualify for over here.

For example, if, having done the two stress tests above, the Irish lender calculates that the UK property is running at a shortfall of, say €250 per month, then it will be treated as if you have a personal loan or car loan of €250 per month in affordability calculations, i.e. it will reduce the amount you can borrow.

3DataModem

As Liam says above, existing buy-to-let properties are treated absolutely punitively (you could say, correctly) by most banks in Ireland now.

If it is the case that your rent is way way above the mortgage, it could help rather than hinder, but speak to a lender first to get an idea.

The_Fitz

Liam D Ferguson wrote: »

If you're applying for a mortgage in Ireland, any existing loans and mortgages will be taken into account. Most lenders will "stress-test" the UK property - they will discount the amount of rent you're receiving to allow for tax and/or void periods etc., and they will add a few percent on to the interest rate to allow for possible future interest rate rises.

So the rent you're receiving would need to be substantially greater than the mortgage repayment for the UK property to be considered to be "washing its own face". If not, then any shortfall will be taken into account in the assessment of what level of mortgage you qualify for over here.

For example, if, having done the two stress tests above, the Irish lender calculates that the UK property is running at a shortfall of, say €250 per month, then it will be treated as if you have a personal loan or car loan of €250 per month in affordability calculations, i.e. it will reduce the amount you can borrow.

3DataModem wrote: »

As Liam says above, existing buy-to-let properties are treated absolutely punitively (you could say, correctly) by most banks in Ireland now.

If it is the case that your rent is way way above the mortgage, it could help rather than hinder, but speak to a lender first to get an idea.

Cheers folks.

The rental income would probably just about cover the mortgage of the property in England. Maybe a little less, but won't be higher.

We didn't buy a property to rent out, it's just fallen that way.