Getting 2nd mortgage to buy 2nd property

Besides the fact that most landlords are getting out so that should be a sign to you what the rental game is like. You dont say how much you currently owe on your mortgage or how much would be any new property you would be looking at.

The risk with being a landlord in this market is not having your rental go unoccupied, it's having your tenants refuse to pay and you not being legally able to evict them in a timely manner.

Buy to let mortgages have much higher interest rates, so that on top of you owing 220k on your first makes it very unlikely you will meet any lender's stress tests.

Without wanting to sound smart or harsh, but the only solution is to have a bigger salary or more savings so you need to borrow less.

Renting rooms out and renting an entire property out are 2 very very different things.

Its going to be very difficult to convince a bank to let you have borrowings of nearly 550K on a combined annual salary of 90K. With the cost of labor and supplies at the moment 30K is not going to go very far in terms of building a granny flat. If you are tight on space why are you renting out a room?

You're asking for 350-270k while already having a debt of 220k, that's where the 550k is coming from, or more accurately 490k-570k

My best advice to you would be to sell up and move rather than take a mortgage out for the purposes of rental. The money not spent on the mortgage can be saved

I did this a few years ago.

albeit with a monthly mortgage of 300 euro on the first house.

PTSB got me over the line, also got an exemption in the 20% deposit, dunno about deposits and stuff now , I had to clear a few loans and stuff.

but they took some of the perceived rental income from the first house into consideration for capability to repay, which is what helped me get the mortgage.

the total of both house borrowing were around 210k.

all the bank cares about is the ability to repay, that’s why you are failing the affordability.

also your first house will have to change to a buy to let mortgage and insurance also, which increases the repayments dramatically.

You can tell the bank that all you want; it won't change the fact that you will be over-borrowing.

Also, have you taken the ~50% tax you will have to pay on the rental income in to account in your concept of it covering the mortgage?

10% deposit typically applies only to First Time Buyers. You are not a first time buyer.

If you were selling house A and buying house B, banks will typically need you to have 20% desposit/equity from House A sale.

However you are proposing keeping house A and buying an additional House B. This means you will be looking at a Buy To Let mortgage. BTL mortgages typically require desposit of at least 30%. Also Buy To Let mortgages rates are between 5.5% and 8.5% at the moment. Given you're looking at renting House A, that's the one which will need switching to a BTL mortgage. The bank would have to decide how all that switching will work. For Buy To Let mortgages in addition to your own legal fees, you usually have to pay the Bank's legal fees too.

While I appreciate what you are trying to do, the various figures you have provided suggest you cannot afford to do this right now. If one bank has already turned you down, the rest probably will, too. However it's best to meet with them in person.

It is possible where your circumstances change, to have a discussion with a bank about renting a house out for up to one year without impacting your existing mortgage rates. Any formal rental arrangement requires the approval of your mortgage lender as it may be a breach of your mortgage terms.

Renting and BTL mortgages are high risk and banks decide accordingly.

If you are looking to get into the rental market why dont you look at a hoilday home spain you also get the use of it & good value to be had.

"Yes you are borrowing but the property value goes up and it will eventually pay for itself. Isn't?"

Kinda big assumption that brought a lot of hardship on people like you a few years ago. Difference then was that lenders were gung ho to lend, then they and we all got stung so more cautious now, hopefully.

There have to be practical affordable limits on residential property that reflect the realities of the economy, wages and costs of living etc. It's not like a balloon that you can keep on blowing up, without letting a bit of air out of it now & then...

You should ask people who bought a house before 2008 what their opinion of the above statement is. And right now prices aren't too far off pre-2008 prices...

You need to talk to a mortgage broker. They will do the maths for you. A good broker will bust a gut to get you a 2nd mortgage and thus get his fee.

There is good money to be had in renting property that comes to market with no RTB restrictions (like your first property).

You might have to delay your move until your earnings increase plus you have a bigger deposit for property 2. Being a landlord isn’t for everyone - make sure you know about the pitfalls.

I like your ambition and entrepreneurial spirit.

OP I think you need to make more progress in paying off your current mortgage as the max borrowings you can have on your income at the minute is ~315K, you can revisit the idea of owning a rental property in the future when you are in a better financial position.

For you to purchase a second property with a value of ~350K you would need a ~70K deposit, a 25 year mortgage for the remaining amount will have monthly payments of approx. 1.6K. Keeping in mind that you will have repairs, maintenance, property taxes, insurance on two properties and 52% of the rent will be heading in the direction of the tax man, you also have to consider that you will be paying ~210K in interest on that mortgage over 25 years. It would probably take 45-60 years of rental income from your current property to cover the cost of the new property not including your deposit.

You can’t tell the bank that, whether the bank takes Rental income into consideration is up to them.

PTSB did take a % of rental income into consideration for me back then.

Why do you have debts with savings of 1400 per month? And a lodger paying €500 a month? You shouldn’t have any debts surely? Also a few pointers about buying a house in Spain. The Spanish government do not like foreigners buying property there. If you think tax is bad in Ireland you’ll be in for a shock when you sell a property in Spain!

my 2 cents. Just keep saving all the extra cash. your payment will increase in 2025 , so it wont be 850 anymore.

I paid off my mortgage early buy going on a variable and throwing extra cash at it.

you mentioned a few times that the house cost 260k. that will be nearly 400k by the time you have paid the bank off. people tend to forget this part.

@holliehobbie Deal with the Spanish government or local government? Absolutely NO way they make Irish tax laws pallitable and planning permission reasonable.

First there is 30% tax at either end when you buy/sell a house in Spain. There is no planing protection , if the goverment want to route a road in your direction, unless you pay them to redirect. You wouldnt get it from mafia.