Holiday home mortgage rates - any ideas?

BettyBoo2011

Hi all,

My mum passed away recently and I am going to buy her house as a holiday home. There is equity release loan on the house so I have to pay the full market value -180k. I am not buying for purely sentimental reasons, I spend a lot of time in my home area (although it’s a few hours from my current work) and longer term may well look to move back there. She was my only parent and because of the life loan her house has to be sold quickly and it would also be hard to lose it and throw everything out so soon after her death.

We are very lucky to have a small tracker on our main residence with KBC. I have a decent pot of savings and can afford to put 30% or so of cash down on the house.

Central bank will only loan max of 70% value on a holiday home anyways as they and the banks appear to classify it as a buy to let as you can only have one primary dwelling house which is the property we have in Dublin.

BOI originally quoted me a rate of 3.2% but then said they can’t offer me that as it’s their home rate and so best offer is a 4.8% rate which adds over 100 quid a month to repayments. I rang AIB and KBC today who said same.

I rang the mortgage brokers and the guy there said he could get me a 3.2/3.4% rate even with it not being primary home but he could not understand why BOI would classify it as buy to let... he would not say where he could get that as I would need to pay their fee if I want to use them....

Anyone any thoughts or advice on where I can get a better rate?

Can I only apply from Irish banks? I thought I heard of someone before getting a cheaper rate from a German bank...

It’s a hard situation as it is and in a few years we want to trade up our current house so can’t throw every penny I have after it...

Many thanks

BB

The_Conductor

BB-

From the brief description you've given- it sounds like you're going to over-extend yourself, pretty much regardless of what you do.

In your position I'd set down on paper- my priorities in order.

If purchasing this property is top of the list- then, you need to get the maximum possible mortgage for this property- which is 70%
Thereafter- the lesser priority is doing up your current property. As you have significant equity in it- how about some sort of an equity release for the specific purpose of doing up the house? Banks will entertain this- providing the cash is specifically being ploughed back into the property. It is an additional mortgage on Property 1- at whatever terms they currently have for current loans (aka- you're not going to get tracker rates etc).

Its doable- providing you accept there is a cost associated with it- and indeed, are capable of hitting the rules- specifically net income rules- which might be your bottleneck- given all the additional debt you'd be taking on.

BettyBoo2011

The_Conductor wrote: »

BB-

From the brief description you've given- it sounds like you're going to over-extend yourself, pretty much regardless of what you do.

In your position I'd set down on paper- my priorities in order.

If purchasing this property is top of the list- then, you need to get the maximum possible mortgage for this property- which is 70%
Thereafter- the lesser priority is doing up your current property. As you have significant equity in it- how about some sort of an equity release for the specific purpose of doing up the house? Banks will entertain this- providing the cash is specifically being ploughed back into the property. It is an additional mortgage on Property 1- at whatever terms they currently have for current loans (aka- you're not going to get tracker rates etc).

Its doable- providing you accept there is a cost associated with it- and indeed, are capable of hitting the rules- specifically net income rules- which might be your bottleneck- given all the additional debt you'd be taking on.

Thanks very much for your reply.

Sorry I may have caused some confusion. There is no house that needs money to do up.... I have done all the numbers and pros and cons on paper and financially I will still be saving 20% of my income every month even with the additional mortgage and maintaining my current standard of living. We are in a good financial position.

I am simply trying to figure out who is offering the best rate for these types of purchases. It’s a shame it’s gets classified the same as buy to let as there will never be an income from it and it will simply set off the costs we would pay for external accommodation in the area instead when spending time there....

If anyone knows what options the broker may have been referring to or has bought a holiday home I would appreciate hearing from you

Many thanks

BettyBoo2011

BettyBoo2011 wrote: »

Thanks very much for your reply.

Sorry I may have caused some confusion. There is no house that needs money to do up.... I have done all the numbers and pros and cons on paper and financially I will still be saving 20% of my income every month even with the additional mortgage and maintaining my current standard of living. We are in a good financial position.

I am simply trying to figure out who is offering the best rate for these types of purchases. It’s a shame it’s gets classified the same as buy to let as there will never be an income from it and it will simply set off the costs we would pay for external accommodation in the area instead when spending time there....

If anyone knows what options the broker may have been referring to or has bought a holiday home I would appreciate hearing from you

Many thanks

I got sorted via a good broker today... so all good! Thanks anyways ðŸ‘ðŸ»

thereality

BettyBoo2011 wrote: »

I got sorted via a good broker today... so all good! Thanks anyways ðŸ‘ðŸ»

What rate did you get?