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Equity release in buy to let

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  • 01-06-2019 6:03pm
    #1
    Looly8726
    Registered Users Posts: 43 ✭


    Is it possible to release equity in a property that is rented out? It was once a ppr and is mortgage free.


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    #2
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Looly8726 wrote: »
    Is it possible to release equity in a property that is rented out? It was once a ppr and is mortgage free.
    It is theoretically possible, but finding lenders these days is a bit of a struggle.


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    #3
    Looly8726
    Registered Users Posts: 43 ✭Looly8726


    4ensic15 wrote: »
    It is theoretically possible, but finding lenders these days is a bit of a struggle.

    Thank you. Any pointers where to look?


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    #4
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Looly8726 wrote: »
    Thank you. Any pointers where to look?

    Best thing to do would be to engage a competent mortgage broker.


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    #5
    Samuel T. Cogley
    Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    Would such a mortgage attract tax relief on the interest?


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    #6
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Samuel T. Cogley wrote: »
    Would such a mortgage attract tax relief on the interest?

    It would depend on what the money was used for.


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    #7
    Looly8726
    Registered Users Posts: 43 ✭Looly8726


    Samuel T. Cogley wrote: »
    Would such a mortgage attract tax relief on the interest?

    This is what I’m wondering. We have a house currently which was bought with cash. Currently buying a second home which we will live in as our ppr and in two minds as to whether we should keep the old home as a rental or just sell it and clear the mortgage on the new home.
    If we could release equity on the old home and rent it out, getting tax relief on the interest and pay off some of the mortgage from the new home it would seem like a no brainer!


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    #8
    Samuel T. Cogley
    Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    4ensic15 wrote: »
    It would depend on what the money was used for.


    Lets say to clear a/some debt on one's PPR.


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    #9
    davindub
    Registered Users Posts: 1,447 ✭✭✭davindub


    Samuel T. Cogley wrote: »
    4ensic15 wrote: »
    It would depend on what the money was used for.


    Lets say to clear a/some debt on one's PPR.

    No. Only if the loan was for improvements on the subject rental. It doesn't have to be mortgage interest either, you can claim back interest on any finance agreement, e.g. remortgage the PPR for an extension on the rental.


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    #10
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    davindub wrote: »
    . remortgage the PPR for an extension on the rental.

    What is that only a mortgage?


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    #11
    Caranica
    Registered Users Posts: 10,116 ✭✭✭✭Caranica


    Looly8726 wrote: »
    If we could release equity on the old home and rent it out, getting tax relief on the interest and pay off some of the mortgage from the new home it would seem like a no brainer!

    Not a no brainer at all. What if tenants stop paying rent and /or trash the place. My former tenants did damage to the equivalent of 10 months rent and stopped paying rent and over held after termination date. Same and worse happened to friends, in one case 40k worth of damage was done to the property. Plenty of horror stories on here too. And that's before you add in taxes and anti landlord legislation. Sell, sell, sell


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    #12
    duffman13
    Registered Users Posts: 8,952 ✭✭✭duffman13


    Looly8726 wrote: »
    Is it possible to release equity in a property that is rented out? It was once a ppr and is mortgage free.

    Contact a broker, it's possible, I explored the possibility recently and only one lender would entertain the idea but the only deal with brokers as far as I know. Wasn't viable for us in the end but it would depend on what you are doing with the money id think


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    #13
    drunkmonkey
    Registered Users Posts: 28,192 ✭✭✭✭drunkmonkey


    If you mortgage the one your renting out you should be able to claim tax relief on the interest payments. I'd go through a broker or at least get them to put you in touch with a friendly mortgage provider. I wouldn't be mentioning anything about it being a buy to let. It's just a second home. That way you get better rates.


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    #14
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    drunkmonkey wrote: »
    If you mortgage the one your renting out you should be able to claim tax relief on the interest payments.

    Only if the money is spent on the rented house. The o/p wants to put it towards the new house. Mortgage relief is allowed insofar as it is a business expense. No way is spending money on one's private home a business expense.


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    #15
    davindub
    Registered Users Posts: 1,447 ✭✭✭davindub


    4ensic15 wrote: »
    davindub wrote: »
    . remortgage the PPR for an extension on the rental.

    What is that only a mortgage?

    Yes, a remortgage occurs when you have paid down enough/ all of the principle on a loan secured on a property, and you obtain further/ new loans secured against the property.


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    #16
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    davindub wrote: »
    Yes, a remortgage occurs when you have paid down enough/ all of the principle on a loan secured on a property, and you obtain further/ new loans secured against the property.

    Definition of a mortgage
    "a legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt."


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    #17
    davindub
    Registered Users Posts: 1,447 ✭✭✭davindub


    4ensic15 wrote: »
    davindub wrote: »
    Yes, a remortgage occurs when you have paid down enough/ all of the principle on a loan secured on a property, and you obtain further/ new loans secured against the property.

    Definition of a mortgage
    "a legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt."

    You needed to google it? 😂


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    #18
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    davindub wrote: »
    You needed to google it? ��

    No, I didn't. You did. I just needed to paste the text rather than type it. For YOUR benefit.


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    #19
    davindub
    Registered Users Posts: 1,447 ✭✭✭davindub


    4ensic15 wrote: »
    davindub wrote: »
    You needed to google it? ��

    No, I didn't. You did. I just needed to paste the text rather than type it. For YOUR benefit.

    You did, that is the text from the google definition, you posted it as a definition! You deny it?


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    #20
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    davindub wrote: »
    You did, that is the text from the google definition, you posted it as a definition! You deny it?

    I am not denying that I pasted it. I am denying that I NEEDED to. Get the difference?


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    #21
    gogo
    Registered Users Posts: 1,452 ✭✭✭gogo


    Looly8726 wrote: »
    If we could release equity on the old home and rent it out, getting tax relief on the interest and pay off some of the mortgage from the new home it would seem like a no brainer!

    You’d be borrowing under a higher BTL rate to clear down a mortgage at a lower rate...

    Banks will entertain an equity release on a btl but not for this purpose..


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