But a bigger question for you is whether or not it is right to keep your investment property. In general, as the value of the property increases and as the outstanding balance on the tracker decreases, the case for holding onto the investment property becomes weaker. It becomes weaker still if you have an expensive mortgage on your home. It becomes weaker again if you have any problems with cash-flow.
Here is your current position:
Now look what happens if you sell the investment property and use the net proceeds to pay down the mortgage on your family home:
The interest rate on your home could well fall below 3.1% if a new lender enters the market.
Life would be a lot simpler as you would not have the hassle of tenants.
Your cash flow would be better because you are not paying down such high loans.
Your risk of bad tenants would be gone.
You would be less exposed to property price falls
You would be less exposed to interest rate rises.
You might end up with a CGT liability as it's no longer your PPR - against that you might end up with a useful CGT loss which you could use against capital gains elsewhere.
Reasons why you might hold onto the investment
You expect property prices to rise - but you already have exposure to the market in your family home.
You might be trading up in the short-term. If so, then AIB would probably allow you to move your tracker to the new property with a margin of 1.6%
Even if you decide to hold onto your investment property for now, you should review the decision every year or so
As most of your repayments are capital, the balance on the tracker becomes less and less and the case for keeping it becomes weaker.
If you have a good tenant, you might be tempted to keep it. But if the tenant leaves, then it would probably be time to sell it.
Brendan