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Remortgaging

  • 21-04-2020 12:52pm
    #1
    the-island-man
    Registered Users, Registered Users 2 Posts: 497 ✭✭


    Hi,

    My wife and I currently have a family home and an investment property. We own the investment property outright and are under 80% LTV on the family home.

    I would like to remortgage the investment property as much as I can in order to pay down the mortgage principal on the family home. The reason I see to do this is so that I can use the mortgage interest in my tax return to reduce my tax liability on the rental income.

    Has anyone done anything similar? How easy or difficult is it? Can anyone recommend a good mortgage broker?
    Tagged:


Comments

  • #2
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    the-island-man wrote: »
    Hi,

    My wife and I currently have a family home and an investment property. We own the investment property outright and are under 80% LTV on the family home.

    I would like to remortgage the investment property as much as I can in order to pay down the mortgage principal on the family home. The reason I see to do this is so that I can use the mortgage interest in my tax return to reduce my tax liability on the rental income.

    Has anyone done anything similar? How easy or difficult is it? Can anyone recommend a good mortgage broker?

    The interests rates will be considerably higher on the Investment property. Would there be a benefit in switching?


  • #3
    Salary Negotiator
    Closed Accounts Posts: 1,148 ✭✭✭Salary Negotiator


    Pretty sure you can only write off mortgage interest on an investment property if the mortgage was used to purchase the investment property.


  • #4
    the-island-man
    Registered Users, Registered Users 2 Posts: 497 ✭✭the-island-man


    Deleted User wrote: »
    The interests rates will be considerably higher on the Investment property. Would there be a benefit in switching?

    Thank you for your response.

    Is that because it would be classified as buy to let?


  • #5
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    the-island-man wrote: »
    Thank you for your response.

    Is that because it would be classified as buy to let?

    Yes, they'd be in the region of double residential mortgage rates, so I can't see it being a benefit. Although I see ICS mortgages have a 3.95% rate for LTV <70%. For comparison you can get a KBC residential mortgage for 2.3% (fixed for three years).


  • #6
    the-island-man
    Registered Users, Registered Users 2 Posts: 497 ✭✭the-island-man


    Deleted User wrote: »
    Yes, they'd be in the region of double residential mortgage rates, so I can't see it being a benefit. Although I see ICS mortgages have a 3.95% rate for LTV <70%. For comparison you can get a KBC residential mortgage for 2.3% (fixed for three years).

    They'll get you which ever way you turn :rolleyes:


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  • #7
    bikeman1
    Registered Users, Registered Users 2 Posts: 1,380 ✭✭✭bikeman1


    the-island-man wrote:
    I would like to remortgage the investment property as much as I can in order to pay down the mortgage principal on the family home. The reason I see to do this is so that I can use the mortgage interest in my tax return to reduce my tax liability on the rental income.

    I'm afraid to say Revenue will not allow that in the slightest. You can only use the interest on the mortgage taken out to purchase the investment property at the outset.

    Subsequent remortgages would not count and there would have to be a calculation done to ascertain the correct amount of true interest pertaining to your investment property.

    You can't just go, oh I'll move that interest over there and save a whack load of tax. Tax rules have more than closed that loophole already.


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