Advice/Thoughts on moving while on tracker

[Ninetysix]

Hi All,
Looking for some thoughts/advice, we're considering moving and not sure what way the land currently lies with banks these days. Here's our circumstances, i'd appreciate any thoughts;

- Current Mortgage €225k (€950 per month - tracker)
- Current Value €200-230k
- House Income €110k per annum (gross) (€5,500 per month net)
- Savings €30k
- Both permanent professionals in long term employment
- No other loans or credit card debt

We're looking at a house with an asking price €315k and leaning towards holding onto our own 3 bed semi-d and renting. We're Dublin based and rents are very strong in our area. Rent values cover our mortgage.

Will a bank consider us or will we be laughed at? Any advice on how best to approach the banks?

 

[elcato]

Are you willing to put up with the chores involved in being a landlord ? Remember you will have to make a tax return and pay all the NPPR, PRTB fees. You may not have a tenant in for some months of the year. You may well lose your tracker if you change from a residential mortgage. Check your T&C.

Note : I updated the title. Other mods may not be as forgiving and just delete the post for lack of clarity. You may need to be aware that a good heading will help with response traffic.

 

[Ninetysix]

Are you willing to put up with the chores involved in being a landlord ? Remember you will have to make a tax return and pay all the NPPR, PRTB fees. You may not have a tenant in for some months of the year. You may well lose your tracker if you change from a residential mortgage. Check your T&C.

Good point - it's something i've considered and right now, Yes, i'm willing to complete the necessary requirements (and fees) etc. However I may not have a decision on this, while I might be happy to do this i'm not sure what the banks will agree. Thoughts?

Note : I updated the title. Other mods may not be as forgiving and just delete the post for lack of clarity. You may need to be aware that a good heading will help with response traffic.

Thanks, I had initially went to reply to an exsisting thread however it felt like I was hijacking it a little so decided to open a new. Appreciate the help.

 

[essjay]

I had considered the same but once I worked out the tax it mad it a no brainer. I'm in D12 and the rents seems to be around the €1100pm mark. Our mortgage is around €1000. If I was to rent the house and pay tax, I would need to charge €1700pm to break even and this does not include any maintenance costs.

 

[Daisy09]

Essjay, out of interest please could you outline what the extra 700 a month is to pay for. I'm not doubting you at all, just interested as am completely clueless with regards to the whole landlord thing.

Thanks,

 

[essjay]

Essjay, out of interest please could you outline what the extra 700 a month is to pay for. I'm not doubting you at all, just interested as am completely clueless with regards to the whole landlord thing.

Thanks,

Hopefully I can remember it all.

So assuming my mortgage is €1000 a month of which €700 is interest. 75% of that can offset against the rental income.

I initially charge €1100pm rent of which €525 is tax free (75% of €700). The remaining €575 is now taxed at 41% (not including USC). This basically means I'm paying €235 tax on an €1100 rental income.

To break even, I'd need to charge roughly €1500pm but that doesn't include any maintenance costs (which you might be able to offset against tax) or USC.

I think with the €1700 I mentioned above I was assuming a lower amount of mortgage interest.

The numbers above might be over simplistic or even wrong. Check the below thread:
askaboutmoney.com/showthread.php?t=151890