Getting 2nd mortgage to buy 2nd property

Keep shopping around sltough there aren''t many options. Bear in mind the tax burden that will be on the rental income from the first property when rented as that will be a significant factor.

I don't know if the banks stress test like they do for commercial units. However for commercial they will have a an LTV threshold as test one and also test the repayments against the net rental income. For commercial they apear to be requiring 40% minimum equity and then they assess the rent roll against the repayments and end up at the lower of the two figures as the max loan value.

You need to get someone to explain the criteria being applied so that you can work the numbers from that side. Also check what interest rates are being used as investment rates will be higher than a domestic mortgage. No harm in wiping the 8k out if you can as its not helping the case even though its relatively small.

With the details shared, I think you would be crazy to do anything other than sell current house and buy the house you want.

Is your current mortgage interest only or something?

you say starting value = 260k and current debt on it is 220k. If there was a 40k deposit, your 850pm payments are just covering interest, yes?

And the mortgage term is 5years. What is supposed to happen in 2025 when the fixed term is up?

Having an interest only mortgage on your existing house will hold you back from a 2nd mortgage IMO.

While landlord experience can vary a lot (loads of bad stories on Boards - but we've been lucky I guess), I do agree that being close to a hospital will keep demand high. The issue you will face is making sure you have good tenants - no matter where the property is.

you are though...

you already owe €220k on your existing home? and you want to borrow an additional €270k-€350k? that adds up to €490k - €570k of total borrowing.

Any bank that offers you a loan will be doing so in the knowledge that you already have an outstanding mortgage of €220k, and they will be counting your ability to pay them back in addition to paying back your existing loan, and therefore will only lend to you within the borrowing limits of 3.5 times salary.

If the limit of lending is 3.5 times your (combined) salary (€90k), then you can borrow up to a max of €315k, and as you already have a loan to the tune of €220k, then the most any bank will give you is €95k (they won't simply forget about that other €220k you owe another bank).

Rental returns are not guaranteed. There is a significant element of risk involved with being a landlord in this country.

Also have you actually sat down and done the maths on this? How much rent would you get for the house per month? Is it more (after 50% tax) than you would save if you just sold the 1st house and had a smaller mortgage on your new purchase?

As per above - If you are tight on space why are you renting out a room? And talking about a granny flat. Doesn't really add up.

You're proposition sounds like a bad lending risk. Save more, pay off more and then come back to it.

Eh, I bought a house at the height of the boom in 2006 which still has not got back to anywhere near the money I paid for it, 18 years later! I sold a house at the same time for an equally ludicrous amount, relatively speaking, so I was never in negative equity - but I still feel to this day for the first-time buyer who bought my house, and it is absolutely not true that property always increases in value. If that's what you've been reading, you need to find a different library.

You're also completely glossing over the interim period where you're renting to tenants who have massive rights in a mega-regulated industry, and that's only going one way (and not in favour of the landlord).

As one or more posters have pointed out already, all it takes is one set of tenants, or even just one tenant, to decide to act the goat (trash the place, piss off the neighbours for e.g.) - you want them out - they dig in and you're tied up in legal knots for potentially years with no rental income, trying to pay two mortgages on your combined domestic income.

Or indeed, one of your domestic incomes goes up in smoke due to unemployment, injury, illness, family circumstances, etc etc.

There's a long road in between now and 20 years time when yes, the property will probably be worth a lot more than it is now - but you have to consider the potential potholes along that road.

Exhibit No. 1 right here!! (see my post above)

One thing to remember though is that 500,000 in 2008 would be worth more than 500,000 in 2024. So yes, the figures might nearly look similar but we'd need to exceed the 2008 prices to actually achieve parity.

Some online inflation calculators I'm looking at are saying about 17-18% beyond 2008 prices.

What investment books suggested this if you don't mind me asking?

Ladybird must have published those books. Property isnt diversified at all.

I've no problem with people buying property as part of a portfolio but there's plenty who have been burnt badly

I echo what everyone else is saying, thread carefully. Also wonder why all the other landlords are running out of the business. Be aware of what future government amendments to the constitution are on the cards.

Well before the last recession, I had a "buddy" and Mrs, cock sure of themselves, power couple, 5 years into their first mortgage, took on a second house as an in vestment. Given it was a lot of work and tenants were a pain in the hole. They made it work. They doubled their money. With no idea that the recession was on the way (I lacked financial literacy at the time), I suggested they sell both houses and rent a month before the financial collapse. They were so sure of themselves they bought in again to a town house converted to flats. Within 2 years everything had failed, his career was on the rocks, she couldnt pass professional exams. I think they were bipolar (hi highs and lo lows type).

I couldnt understand why they were flipping out over 0.75% rate increase. I do now.

Tenants are a pain in the hole, late rent, rows, rows with neighbours, maintenance, insurance, tax, bins, mould, the list goes on and on. A Landlords lot is not a pleasant one especially if ye in mortgage.

Find out about the next proposed ammendment to the constitution. Dont blame me I didnt propse it or write it but its on the way.