# Parents tracker coming to maturity



## Brian McD (28 May 2020)

First time using AAM, but a great admirer of the website. 
My parents took out a €500k interest only tracker mortgage (ECB + 0.5%) from Danske back in 2007 to renovate a retail unit & 3 apartments. This loan was secured on their principal private residence & matures in early 2022. At that date they will still owe approximately 50% of the mortgage, so will have a refinancing requirement of c€250k
This would be OK, given the rental income from the building (€65k p.a), but they will be 74in early 2022 & obviously banks are reluctant / won’t lend to people of this age. 

They have a combined income of €120k per annum from this building, pensions and land & house lettings . They could sell a field to pay back this debt but ideally they want to avoid that.I have asked my bank to see if they could just put the €250k required on to my mortgage and while they haven’t said no yet , I don’t think they are overly keen on the idea. If I took this debt on to my current mortgage I’d have a LTV of 50% / LTI of 2.5x,  I would also have €100k I could give / lend them , but then there could be negative tax implications of doing that also, so I’m just trying to find the best overall solution here to this mess.

Would appreciate any advice to help them with this problem.


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## NoRegretsCoyote (28 May 2020)

Can they sell either the retail unit or some or all of the apartments separately?


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## Protocol (28 May 2020)

Given that they have several property assets, it seems like they can easily repay their debts by selling some of their properties.


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## Brian McD (28 May 2020)

Ideally, they would like not to sell anything. What they have suggested is that my sister & I each take (inherit) a farm, and then we use this as collateral to pay back their loan. Would this work ? 
Their preference is an inheritance/ debt solution over selling assets


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## Brendan Burgess (28 May 2020)

A few options if they don't want to sell anything. 

1) You could lend them your €100k - there are no significant tax implications to this. 
2) If your bank refuses to give you a remortgage of €150k, you could switch to one of the new lenders and they will probably give you the money.
3) They could sell you one of the properties and it would be very easy for you to get a mortgage on it.

But as it's two years away, you shouldn't worry too much about it.  

Don't pursue it with your bank at this stage.   The policy may well have changed in two years. 

Brendan


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## Brian McD (28 May 2020)

Thanks Brendan, some food for thought there alright! One of those options should probably solve the problem. I realise it’s just under 2 years away but they just want to put a solution in place ASAP & put it behind them as they are concerned right now


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## Brendan Burgess (28 May 2020)

I think that they are right to be conscious of it and to plan ahead. 

They can avoid doing anything stupid such as buying another property or committing to any other long-term investment. 

And likewise, you can keep your €100k available and not pay down your own mortgage. 

But in terms of asking your bank or their bank for a solution, now is not the time.

Brendan


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