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Renting rooms to increase borrowing capacity?

As house prices and mortgage levels have increased, many first time buyers are seeking to add to income by renting out rooms in their newly acquired houses. Most lenders will take the potential for such income into account when assessing borrowing capacity.

Lenders mainly review room rental on a case by case basis, please contact our mortgage consultant for further information or apply online.

Rent a Room Scheme

The Rent a Room scheme was set up to encourage home owners to provide residential accommodation by renting out rooms in their own home. This relief is effective from April 6 2001.

Gross annual rental income of less than €6,000 will be exempt from tax where a room (or rooms) in a person's principal private residence is let as residential accommodation.

Furthermore, availing of this scheme will not adversely effect any of the following entitlements:

- stamp duty relief on purchase of principal private residence
- principal private residence capital gains tax relief on disposal
- mortgage interest relief.

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Variable rate warning: The cost of your monthly repayments may increase - If you do not keep up your repayments you may lose your home. The payment rates on this housing loan may be adjusted by the lender from time to time.

Warning: Your home is at risk if you do not keep up payments on a mortgage or any other loan secured on it

Fixed rate warning: You may have to pay charges if you pay off your fixed-rate loan early

Interest only warning: The entire amount that you have borrowed will still be outstanding at the end of the interest-only period

Debt consolidation warning: This new loan may take longer to pay off than your previous loans. This means you may pay more than if you paid over a shorter term

Endowment loan warning: There is no guarantee that the proceeds of the [Insurance Policy / Pension Policy] will be sufficient to repay the loan in full when it becomes due for repayment