Worth the investment?

The address: 61 Cork Street, Dublin 8.

The address:61 Cork Street, Dublin 8.

The agent:Douglas Newman Good.

The property:two-bedroom penthouse apartment for €550,000.

The landscape:located on Cork Street, this apartment has views across the southside as far as the Dublin mountains.

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The features:this 62sq m (670sq ft) apartment is fitted to a high standard with wooden floors throughout and a modern bathroom. It has a wraparound south-facing balcony, which is around 45sq m (487sq ft), and an underground car-parking space.

How much for an investor to buy?At AIB's buy-to-let tracker mortgage rate of 4.6 per cent, the repayments on a loan equivalent to 85 per cent of the asking price - a sum of €467,500 - would be €2,623 a month over 25 years. On an interest-only mortgage based on the same rate and term, the repayments would be €1,792 a month.

How much for a residential buyer?A single first-time buyer would need a salary of €132,500 to fund a 100 per cent mortgage over 35 years, while a couple would need to earn around €70,000 each. Based on AIB's one-year discount tracker rate of 4.1 per cent, the loan would cost €2,464 a month for the first year. On its standard variable rate (SVR) of 4.6 per cent, the repayments would then be €2,629. On a 92 per cent loan of €506,000, the repayments would be €2,267 in the first year and €2,419 based on the SVR.

Potential:this apartment should fetch around €1,500 a month in rent.

Verdict:the property is designed for an investor who is prepared to wait for capital appreciation and is not relying completely on rental income to fund the mortgage.

Calculations by AIB

Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics