Taking a 2nd Mortgage

Hi all


1 year ago i bought an apt with my partner in Dublin , we missed out on the FTB Grant but are now in receipt of the extra 5 year allowance on the current mortagage for this new property.

We are now thinking of buying again , only going for a larger apt but retaining the first property also. The plan is to rent property 1 and live and resie in property 2.

In such circumstances would we loose out on our mortgage releif entitlement given that we have bought again so soon ?
The idea is that the extra income from renting property 1 will contribute to property 2's mortgage.

You won't lose it. You still have four years to run on the first time buyer relief. The relief will only apply to whichever property you live in. That said, the relief isn't huge, so I can't see how it would affect your decision on whether to buy another property to rent.

You get the higher rate of mortgage interest relief for the first 7 tax years that you are paying the mortgage on your principal residence (€8,000 @ 20%) then you go back to the standard rate (€5,080 (off the top of my head, subject to correction) @ 20%) for the remaninder. These amounts are the maximum amounts available for relief, if the interest element in your repayment is less than the applicable maximum then it is this interest amount at 20%.

Have a read of this key post before you firm up your decision - residential property investment is not the guaranteed route to riches that it once was.

Believe it or not, in our current strange system of priorities, property investors get uncapped mortgage interest relief, so you actually end up getting more relief as an investor then when you were the resident of the property.