selling isn't an option.
However what's not clear is how long we'd have that reduced variable rate.
Plus, the rent we're receiving will not go any lower and will go up. We have good long term tenants.
We're also paying approx 1700 a month to the Revenue Commissioners in tax on the rental income and correct me if I'm wrong, but if it's clear we're making a big loss, the tax bill won't be as much?
Thanks again for all the advice.
Firstly on the loss of a tracker rate. I see nothing wrong with this where it makes financial sense on a BTL or home loan. But that is something to be debated on another thread.
Wesley you're breaking the terms of your mortgage so our options are limited. You cannot really force the banks hand but you can try and negotiate. I don't understand how extending the term from 35 years to 40 years and moving to a higher rate is such a great idea. But it means you repay 900 instead of 1200. Your rent is around 700 and basicaly that give you 'about' 600 to pay the 900. So you need to subsidise the mortgage to the tune of at least 300 (and this is without any voids, unforseen problems with tenants and serious repairs).
Can you tell us really how much rent you get into your hand after all costs and taxes annually?
Why is selling not an options? NE of 75K at the current variable rate over 40 years, how much would that cost you?
You have been offered a reduced variable, with no certaintly as to duration. I don't like the sound of that. It really means any gain financially in your income will be slapped with a hike in interest rate and the income gain will be wiped out. Banks are sneaky, that's what they are at here (in my opinion)
There is no such thing as rent not going lower. Ireland is heading to lot so cuts in wages, constant tax increases, reductions in rent supplement etc. So who knows for sure but rents could contract. In any case it's not something that can be relied upon.
Can you clarify the rental tax bill of 1700. I presume this is an annual tax bill? If yes then rent of 680 X 12 = 8160 - 1700 = 6460. That's actually only 538 rent (and you've still to pay for a lot of things. That 300 subsidy I mentioned earlier is diminishing.
What you've not told us is whether you can afford to subsidse the rental.