pension mortgage

M

Molly

Registered User
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Very quick question, does anyone how much of a mortgage can you secure against a pension. ( self employed pension )

Are you restricted to a mortgage amount equivalent to 25% of your pension fund value at maturity. ie the tax free amount, or can you secure a higher amount

Thanks

Niamh
 
The mortgage you will get will be based on the income you have even if you are self employed. If you want a pension mortgage then, the mortgage company will usually ask for the pension fund in projected terms be at least twice the mortgage amount on retirement. It does not have to be equivalent to 25% of the fund value on retirement. Under pension rules you can take more than this out however it will be taxed. You also need to have a guaranteed life long income of €12,700 per year ( from state and or other pensions) or invest €63,500 of the fund into a AMRF untill age 75. The rest of the money in fund is yours.
The above examples are for Personal Pension Plan. The rules are different again of you have a Company Pension Plan.

Hope this help!
Anto
 
Hi Anto, yes thats great help thanks, income wise etc theres no problem with the mortgage amount etc, I jast wanted to clarify that the lenders will allow you secure a mortgage value higher than the 25% tax fre amount. As i was lead to believe otherwise

thanks again
 
Hi Molly,

Depending on the nature of the transaction, some lenders will offer a pension-backed mortgage requiring evidence that the pension fund at retirement will be twice the loan amount, assuming a 6% growth rate, rather than the "25% rule".

Other lenders will simply offer you an interest-only loan and leave it entirely up to you how you plan to repay the capital at the end. You don't have to show them evidence of your pension policy at all. They assume you have that aspect figured out yourself.

Liam D Ferguson
www.ferga.com
 
good point Liam, some lenders are doing interest only on your private residence anyway...!!!

thanks again....
 
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