Before you consider anything drastic, recall the difference between 3% and 5% over 25 years on €150k is €160 a month.When I asked BOI about getting a mortgage for the balance €150k they advised the rate would be 5% or more as it is not our primary residence. House would be in our name with right of residence for
I did ask about equity release and BOI wouldnt entertain it to buy another home. I thought this was odd given the amount of equity here. I will contact a broker thanksNon-PPR mortgage rates are always going to be higher than PPR rates. At a glance 5% isn't unusual. Try other lenders. Try a broker. I presume you're joking, but I don't see how divorce would help?
Or maybe do an equity release on your own (mortgage free?) home and use that to subsidise the purchase of the other property for your mother?
Before you consider anything drastic, recall the difference between 3% and 5% over 25 years on €150k is €160 a month.
TBH if the plan stands or falls on a cost of this much then it's probably worth a rethink.
Indeed! Contacting broker tomorrow.BOI are only one lender. You need to try others.
Her house is valued at €200k which she will sell and gift me the money.
This seems by far the most sensible, especially if it's possible to get equity release on your PPR which would be at a lower rate.A much better solution, if you could finance it would be for you to lend your mother the €150k.
As it will be her home, any increase in value will not be subject to Capital Gains Tax. You will not be charging interest on the €150k but the implied gift will not trouble the Gift Tax thresholds.
Would she have to will the OP the house or could this be managed as a condition of the loan repayment on death.This seems by far the most sensible, especially if it's possible to get equity release on your PPR which would be at a lower rate.
As well as no CGT you also don't have complicated issues with a right of residence on a mortgaged property which could also cause issues with a lender.
Your mother would have to will you the house of course but I assume you can trust her not to renege on this.
I'm not an expert but I assume any outstanding loan is a claim on the estate.Would she have to will the OP the house or could this be managed as a condition of the loan repayment on death.
Your mother would have to will you the house of course but I assume you can trust her not to renege on this.
Why not buy the second house to live in yourself (PPR) and let your mother live in your current house. If after a day or two it doesn't work out you can always swap. The lender(s) can be informed in "due course".
Meeting with solicitor now so will put all of this to her, thanks for the info, not things I would have considered. We have no plan to sell the house upon my mothers death (which hopefully won’t be for many years) we would keep it either to rent or for our kids. I am an only child so no issues with others regarding inheritance.I have to say that I don't like this at all. It doesn't make much sense. What is your reasoning for structuring it like this?
You will own a second property. That will be treated as an investment and the rent not paid could be treated as a gift to your mother. Not an issue under current rules, but could become an issue later. Second properties tend to be subject to taxes at higher rates than family homes.
When your mother dies and you sell the property, you will pay Capital Gains Tax on any increase in value.
If your mother goes into a nursing home in the near future, the gift to you of €200k cash could cause problems for the Fair Deal Scheme. Unlikely to be a problem, but bear it in mind.
A much better solution, if you could finance it would be for you to lend your mother the €150k.
As it will be her home, any increase in value will not be subject to Capital Gains Tax. You will not be charging interest on the €150k but the implied gift will not trouble the Gift Tax thresholds.
Brendan
When you mention gifting her €150k
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