Buying a Second Property?

The Society offers interest-only and annuity mortgages for purchasing a second property. This type of loan will be of interest to the established homeowner thinking about a second property and looking for a long-term investment.

Interest-only loans: This facility improves the affordability of this type of purchase potentially allowing you to avail of current house prices rather than having to wait until full repayments are affordable. While the property market has undergone substantial growth over the last number of years, it is not realistic to expect this growth rate to continue indefinitely.

Principal features of the Interest-only option:

• Affordability - capital is not repaid during the term of the loan, therefore the repayments are lower than an equivalent annuity (reducing balance) loan. This means that the capital does not reduce but instead becomes due for repayment at maturity. The payment is composed of interest-only, which is more tax efficient. As with any substantial borrowing we encourage customers to fully consider the implications of borrowing at this level.
  
  
• Simplicity - the amount borrowed remains at the initial level, while repayments are calculated on simple interest, thereby enhancing your ability to optimise the operation of the loan from your own perspective.
  
  
• Flexibility - the loan may be converted to an annuity or reducing balance at a time convenient for you e.g., when cash-flow improves after a number of years. The decision to convert to annuity and the timing of this decision is entirely a matter for you, based on your personal circumstances.
  
  
• Repayment - at maturity the entire capital amount borrowed falls due for repayment. We expect that in most cases the loan will be cleared from sale proceeds. In some cases customers may opt to clear from personal resources for example pension policies, savings plans etc. The method used to clear the loan is again entirely a matter for you, we will be happy to discuss any possible options with you.
  
  
• Security - a residential unit (house/apartment/cottage etc) which has been surveyed and deemed acceptable by the Society's valuer.

The Society's standard advance is 80% of the value of the security. If you have equity in your existing property, we may be able to help with a higher loan amount - talk to us.

Up to 100% finance is available where additional property can be offered as security so that the overall loan to value ratio is 75% or less.

As the entire amount remains outstanding for the duration of the loan, we will require assignment of level term life cover for the full amount of the loan and in the names of the borrowers. Unlike a mortgage protection policy, level term cover provides cover for the full amount of the loan for the entire duration, thereby ensuring that you are fully protected.

This product is only available on investment properties and is not available on the family home. We do offer pension or endowment type loans for family home purchase whereby an adequate repayment vehicle is arranged at the outset. The maximum term of loan is 20 years.

Your home is at risk if you do not keep up repayments on a mortgage or any other loan secured on it.
Variable rate loan: The payments rates on this housing loan may be adjusted by the lender from time to time.
Repayments must be affected by monthly direct debit unless otherwise agreed in writing by the Society.
An increase in charge for unpaid direct debits requires the approval of the Financial Regulator.

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