Loan for land

Makes land very expensive specially when you stick stamp duty on it also.

The only thing about the solicitor is it will cover other future loans you might need aswell if you stay with the same bank.

Just checked online was 5.51 on the 29th of August and gone up nearly every week since; went up 5 times in October alone. Think we need an Irish Trump

No by margin I mean what margin are the the bank taking from that rate. Rate quoted would consist of banks margin and the cost of funds or interest they are getting it at. At 6.5 they must be taking a margin of 4 or more I'd imagine.

If borrowing is only 50% they are taking the piss imo.

So basically they can take the land back off you until you’re very last repayment is paid ?

Yea it’s the land you have the loan on.

5% here with BOI but that’s is about 7 years now. Might go up with recent interest rates but no notice of that yet.

have being overpaying so will have it paid off in 3 years. I know allot of people say don’t overpay and let inflation take allot out of the cost but just want to clear and move onto the next plan.

Well typical land loan is 15 years.

some one here said you have to think of loans the same as electricity etc it’s just a bill to get capital and get use to paying it ongoing. However remember the first two years were tight and after that I was grand but in the current macro environment I’d prefer not to be too exposed. The farm wouldn’t justify the investment it is really the full time job that ensures I’m comfortable. But when it came up beside me it’s hard to not take the opportunity.

Valid points. Having purchased a piece of ground in recent years overpaying a loan in the early days is difficult. As in my position I purchase extra stock and also put up a new shed (another loan). But I am now starting to get by self in a position to pay off the loan earlier with over payments my plan is to have it paid off one year early. Took some careful cash flow management over the last few years to make it all work. If the opportunity comes again in the next few years I would definitely consider doing the same again if my financial situation allows. But as I no longer qualify as a young farmer and good few years past 35 I would definitely have to think long and hard on that bloody stamp duty.

What is the situation if a farmer sold a small parcel of land to purchase a larger bit that was in a more suitable location for example with stamp duty etc. is there allowances is this case.

Yes Stamp duty is paid on the net value of land bought minus sold

I think if you are borrowing to buy land now you are paying for the time farm organisation's protest outside farms or land where farmers have failed to repay there loans.

Borrowed in early noughties to buy land. In the end the end the rate I was paying was 1.5% above ECB rate.

Rates I see above quoted for secured borrowing is similar to machinery and car loans. This for a sum that will be 3-10 times larger and over a longer period.

Similar mortgage lending is half the price at a variable rate. Did many lads look for a fixed rate and what kind of rates were on offer. Generally over the last five years fixed rates have been more competitive

Interest isn't totally dead money as it's allowed as a tax expence

The problem I encountered was they weren’t interested in what I had in savings or my off farm employment they wanted to see my tax bill, even though I was making good money on my livestock enterprise and had a record of leasing a farm for over 10 years seemly I wasn’t paying enough tax, they said I would be better off with a higher tax bill going forward if I was looking for money in the future

I believe the bank wants the genuine accounts that will be sent to revenue on your taxation date, don't think prepared accounts, or makey up figures will hack it,

I know, just saying it's not like it used to be.

That's interesting, my loan wasn't on the farm account at the time so was unaware. So at the end of a year, the interest portion of the loan can be written off?

No he said the repayments on 150kover 15 years was 1300/ month. But you could make higher payments if you wanted to. This would reduce the lenght of the loan

You are right I took out a machinery loan this year for 3 years and it is the same rate as the land loan. Wonder how the below will change things. I have loans a plenty plus mortgage. 2 things will say all abour repayment capacity and they can be a millstone. Anyone with young family or thinking starting a family think long and hard. Plenty of land to rent and you can walk away from it and the rent tax deductable.

No why would be? Lots of lads have cars, jeeps and farm machinery on lease or HP and no issue with it. Why rent of land any different 260 an acre to rent land?

Just for example. If you rented that and went into all the schemes damn near get the land and sheds for nothing. Better value than trying to pay back 2 million plus cost to buy. Would be 100k a year for 30 yrs if bought it at 2 million. Goinf to make same money farming it paying off to own it or rent it.

Yeah you need to go into organics like I am in that will be worth 19k a year acreage on top of what you worked out. i am in sucklers so BEEP and BDGP as well for me.

Most of farming is a fools game at moment with exception of dairying. KG who had you the loan with assume KBC or Ulster as BOI and AIB who I am with not come close to that. 7.5 stamp duty too with buying land would be 150k on that place if sold.

The killer with farming are the costs.

You did well; my security was about 3 times loan so roughly 60 to 66 per cent. But my chargeable assets, not secured, (loan on 1 folio only) ie rest of farm loan prob 5% of total value.

Only ever look for last 3 years accounts with me.

When you borrow over a medium or long period it mostly interest in the earlier years and some capital repayment and the opposite towards the end.

If your repayments were 15.5k/ year over the 15 years you would pay about 82500 in interest.

If you paid 20k in capital repayments in the first year @ an interest rate of 6% you be paying 9k in interest the first year approx. Your interest would drop by 1200/year approx until you had the loan paid in 7.5 years.