Home improvement loan

Hi folks,
We're toying with the idea of getting some work done on the house (building over the converted garage, we're the end of a terrace) plus some external insulation / solar water heaters etc. Estimated cost well north of 50k, so would be looking to borrow. Currently on a tracker with Danske and loathe to change it. (€200k approx left, house worth 450-500k (hard to say, last equivalent house sold on this street was last year around 450k), no equivalents on myhome or daft at the moment). I've seen a few "home improvement" type loans around that are on a personal loan basis (high interest, short terms and capped at nowhere near what I'd need to borrow)

Are there any banks out there that do 2nd mortgages, or second charges on the house, or would we be looking at having to look for a new mortgage with another bank for what is needed to borrow for the work plus what's needed to redeem the tracker?

To be honest, I think I already know the answer but I thought I'd put it out to the collective wisdom of AAM

Yakuza said:

..or would we be looking at having to look for a new mortgage with another bank for what is needed to borrow for the work plus what's needed to redeem the tracker?

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I don't know about the first part of your question - I suppose it goes on affordability. Have you checked a few home improvement loan rates and worked out in the first instance if you'd be happy with the required repayment level? I'd imagine that would be the first step - making sure that you yourself are happy with the affordability aspect - before a bank looks at it from their perspective.

With regard to moving off the tracker, will we ever see a financing deal again like that - ever? Open up 2x tabs of Karl Jeacle's mortgage calculator (google it). Stick in the details for your current tracker mortgage. In the second tab, stick in the deal you'd likely be forced onto. Then compare what it will cost you in real terms.

It might be a good time to hold off in any event. Danske are slowly but surely making progress in dismantling their irish business. One of the last things left would be for them to sell off their mortgage book. Perhaps this will happen soon (?). If so, perhaps the new owners will be prepared to do a deal. If they are buying at a discount, they would be in a better position to offer a deal of some sort.

In the current market no Bank will advance funds based on a 2nd charge over your PDH. Danske are out of the market and forget the possibility of a takeover bank ever issuing new funds. If you cannot get funds from another source your only course of action is to re-finance your existing loan with another institution.

Thanks for the replies. I more or less figured as much. We're not in such a hurry to get anything done, but in 6-7 years' time we'll have two teenage kids and a pre-teen and I'd say by then they'll want their own room (and a man cave for Dad too ) We'll probably sit tight for a few more years, pay down the tracker as we can and see what Danske end up doing.

Yakuza said:

Thanks for the replies. I more or less figured as much. We're not in such a hurry to get anything done, but in 6-7 years' time we'll have two teenage kids and a pre-teen and I'd say by then they'll want their own room (and a man cave for Dad too ) We'll probably sit tight for a few more years, pay down the tracker as we can and see what Danske end up doing.

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Yakuza;

Yup, in 6 years 2 + 1 wanting rooms , also 2+1 with Uni 3rd level fees!

In 6 more years , kids gone and too much room!

You cannot win , can you?

I'm with Danske and 18 months ago went to them to ask about extending the mortgage to build an extension. We had equity, both working & could afford the extra repayments. We got a flat out no - with no consideration given to it. I would say forget Danske bank.
The alternatives are to fund it yourself if at all possible or go to someone like Ulster Bank who (at that time) were offering loans for home improvements of up to €35,000 even if the mortgage was held by another bank. Obviously the interest rate is stiffer and the life of the loan is only up to ten years (from memory).
One builder did share his opinion with me - obviously building is in his interest - but that he often sees people who wait too long to build an extension and when they finally do it - it's almost pointless as the kids are ready to move out or have moved out.
We went ahead and built the extension - and honestly it was the best thing we could have done.

Butter I think your builder has a great point, and you could try to put a value on having the extra years enjoying the entention on the house now rather than waiting 5 years, etc.