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Our Irish House - new interest rate, ugh

July 4th, 2013 at 12:33 pm

We just got notice that they are raising the interest rate on the mortgage for our house in Dublin to 4.4%. Ugh. It makes me kind of sad, not for us, because we'll own the house in 2015, but for other people in Ireland, many of whom are upside-down on their mortgages. I don't understand why interest rates are going up with the economy the way it is.

Anyway, here is the calculation (this is all in euro):
Incoming:
rent - 1200

Outgoing:
mortgage - 452
life insurance - 54 (646/year)
neighborhood management fee - 23 (270/year)
prop. insurance - 64 (770/year)
taxes - 234 (2800/year)
second home charge - 17 (200/year)
new property tax - 42 (495/year)

Net:
314 per month (we save this for repairs and for money to use when we are in Europe)

When we own the house we'll have an extra 508 euro that we can use to pay down the principal on our US house.

I should mention that we didn't intend to have investment real estate... when I met D he had the Dublin house and I had the house here. So we ended up with two houses, and have lived in one (and rented out the other) since we got married. First we rented out this house, now we rent out the Dublin house (to friends).

3 Responses to “Our Irish House - new interest rate, ugh”

  1. scfr Says:

    Although you never intended to have investment real estate, are you now glad that you do?

  2. Buendia Says:

    That is a really good question! Yes, I suppose I am just because it's something different from our mutual funds. Also because it makes some money each month. But it's confusing because instead of reinvesting, we know we have to keep the money in there for maintenance/repairs. It's gone up drastically, and down in value, but it's always been worth more than my husband paid for it (currently about 3x as much). But since that isn't always the case with real estate, I'm not sure I would invest in it intentionally. Also, if we really did it for investment, we'd invest somewhere where the rents v. purchase price had a wider gap. Actually in Ireland right now, the rent is usually too low to justify the cost, but my husband bought 20 years ago before the boom (and subsequent bust). One thing I do like is having some money in euro.

  3. scfr Says:

    Interesting. Diversification is usually a good thing; interesting how sometimes "accidental investments" can turn out to be so beneficial.

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