Mortgage News

Below some mortgage information from yesterday's Sunday Business Post.  Good news for those with Tracker Mortgages! With lenders likely to hike interest rates, mortgage-holders and first-time buyers need to look…

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Parent bailouts to trigger CAT mortgage bill

If you have guaranteed your son or daughter’s mortgage and they default on their repayments, they may become liable for CAT (Capital Acquisitions Tax) if you pay their loan to the bank.  This is according to an article by David Clerkin in The Sunday Business Post.

Defaulting mortgage borrowers will face substantial tax liabilities if their banks invoke parental guarantees to get their money back or minimise losses.

Revenue has confirmed that parents or other third parties that have guaranteed a borrower’s loans will be deemed to have given them a gift and triggered a corresponding liability to capital acquisitions tax (CAT).

CAT is applied at a rate of 25 per cent of the value of the gift or donation. Tax rules dictate that a borrower would face a CAT liability of €25,000, for example, if his or her parent is pursued by a bank on foot of a guarantee of €100,000.

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Should you Overpay your Mortgage?

Is it a good idea to overpay your mortgage at the moment, if you can afford it? There tends to be a huge focus on people who are struggling to meet their mortgage repayments.

Many people who bought a house in the last seven years, especially those who took out a 100pc mortgage, are certainly finding it difficult.

But others are managing to repay their mortgage and have benefited hugely from the still low, but rising, level of mortgage rates.

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