Selling house - Payment breaks

D

dublin100

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We want to sell our house which is currenlty let out.
Estate agents recommend giving tenants notice and then selling.

Assuming it will take at least three months to sell, when we won't have tenants in situ, we wanted to ask for a payment break.

The bank are sending us a payment break form and an interest only form.

What are the advantages/disadvantages of each. In particular the payment break one. I presume that with every missed payment, the interest amount due that month goes onto your mortgage?

Thanks
 
I presume that with every missed payment, the interest amount due that month goes onto your mortgage?

Yes, if you owe €100,000 at the start of Month 1 and the interest rate is 5% and you don't pay it, you will owe an extra €416 at the end of month 1. At the end of month 3, if you pay nothing, you will owe around €101,250.

If you pay €416 per month, you will owe €100,000

If you pay €1,000 per month, you will owe €98,250

If you have rental income in the tax year, there is an advantage in paying the interest. You will be able to deduct 75% of it when calculating your taxable income.

Brendan
 
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