Releasing equity on property to invest in high interest deposit

G

gilboy

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With the relatively cheap cost of credit these days and yet the high returns on deposit accounts, are people releasing equity on property and investing money in high interest desposit account.

Is there a catch here or am I missing something? I understand its difficult to release equity these days but across the board there must be 1,000's who could do it - i.e. it healthy financial position.
 
Have you crunched the numbers to see if it makes sense? Factoring in the likes of DIRT (and perhaps PRSI and/or health levy) on deposit interest, the cost of mortgage protection life assurance premium cover for the mortgage topup, the fact that you (owner occupier or landlord) cannot get tax relief on the mortgage interest where the money is used for this sort of scheme etc. etc.
 
No I hadn't - thanks for the input.

One thing I am a little confused about was your reference to PRSI & health levy liability. Would you mind explaining how somebody could be liable for PRSI with respect to income generated from interest on savings
Thanks
 
As far as I know everybody is liable for 2% health levy on deposit interest (even if DIRT is already deducted at source) but the PAYE system is not geared up to collect this, most people don't declare it and Revenue don't bother chasing it in most cases. Self assessed individuals have no choice in the matter and have to declare deposit interest income and thus get stung for the additional charge.
 
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