ptsb charging 5.75% on a buy to let and no option to fix?

Brendan Burgess

Brendan Burgess

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A friend of mine asked me this question.

He has two properties. One has a mortgage of €100k and the other €70k.

They are very low LTVs.
About 7 years left.

He asked ptsb about fixing or reducing the rate and they said that there is no other option other than the 5.75% rate.

I suggested going to another lender and borrowing €170k on one of the properties. And then redeeming both mortgages.

I don't know the options for buy to let rates - but I assume that there is something better out there.

Brendan
 
I see that their rates are lower than he is paying.

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We campaigned successfully a few years ago to make sure that people could the the mortgage rate based on their current LTV and not their initial LTV. But does that not apply to Buy to Let mortgages as well?

Brendan
 
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Finance Ireland have no fixed rates for buy to lets and charge existing customers a higher rate than new customers.

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I thought ICS might be an option, but they don't do fixed rates. Their variable rates are ok, but I wouldn't trust them.

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Hes better off staying as is, and claim his Interest against tax 7 years left , try and save more of any residual rental income and try and get out a couple of years earlier.
 
I see what you mean

He has €170k of a mortgage.
If he saves 1% - that is €1,700
Presumably he can set the legal fees of switching against his rental income?
If so, any reduction in interest after that goes straight to the bottom line but is halved by tax.

Brendan
 
Surely he is better off from a cash flow perspective to seek a lower interest rate. If he had some savings would it be a good idea to pay it off the BTL ? Is writing it off against tax not just making money for the bank ? Should he aim to clear the BTL mortgage ?
 
Brendan Burgess said:
I see what you mean

He has €170k of a mortgage.
If he saves 1% - that is €1,700
Presumably he can set the legal fees of switching against his rental income?
If so, any reduction in interest after that goes straight to the bottom line but is halved by tax.

Brendan
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Fees would be allowed but his net cashflow would probably be lower in the year of the switch its marginal but then add in the hassle of applying etc.
 
This might be simplistic

1% reduction in interest = €1700
Legal ? Say 1500 plus vat =- €1850.

The tax on the extra income and the allowable fees would more or less cancel each other out, 6 years his net gain would be about €820 a year assuming marginal rate of tax .....€5000 its not negative.
 
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