Confused about top up mortgage

[avon]

Hello,

I am considering a top up to my mortgage to amalgamate a car loan and to also do some refurb work to my apartment.

As I have equity in my property i would consider a top up mortgage for this however after searching the site i still am confused about this process.

1 - when topping up a mortgage eg amount €30,000 on a property with a current LTV of 50% which is on a fixed interest rate mortgage, is the new total loan amount (original mortgage amount and new top up amount) refinanced at current interest rates or is the the top up amount only affected by the latest rates?

2 - Are the only fee's asscoiated to this stamp duty and solicitors fee's and is the stamp duty based on the total value of the property ie will I be charged the maximum level of duty?

I hope this is clear.

 

[CmTaz]

Hi Avon - AFAIK it depends on how your top up is done by the bank. If you are changing banks then it will be a new mortgage and the rates will apply on the entire amount as will the stamp duty involved.

If the bank however give you a seperate secured personal loan at the same interest rate as your mortgage you will not be liable for stamp duty and may not need a solicitor.

this would be a far preferable option as because you are on a fixed rate at the moment early redemption to take out a new loan will occur a fee.

 

[redo]

Hello,

I am considering a top up to my mortgage to amalgamate a car loan and to also do some refurb work to my apartment.

As I have equity in my property i would consider a top up mortgage for this however after searching the site i still am confused about this process.

1 - when topping up a mortgage eg amount €30,000 on a property with a current LTV of 50% which is on a fixed interest rate mortgage, is the new total loan amount (original mortgage amount and new top up amount) refinanced at current interest rates or is the the top up amount only affected by the latest rates?

2 - Are the only fee's asscoiated to this stamp duty and solicitors fee's and is the stamp duty based on the total value of the property ie will I be charged the maximum level of duty?

I hope this is clear.

1 - You may not alter your fixed rate mortgage with out incurring some kind of penalty. However, you may borrow 30k at a variable rate or even avail of a 1 yrs fixed discounted rate (which is cheaper that variable). When you fixed portion of your mortage matures, say in 2-5 yrs time, you will be able to roll these two mortages into either a new fixed or variable without incurring any penalties.

2 -Due to the rise in popularity of equity release schemes, these fees are usually rolled into the mortgage and incur no actual outlay. However your life assurance will be increased to reflect the new amount.

Hope that helps.

 

[redo]

Hello,

I am considering a top up to my mortgage to amalgamate a car loan and to also do some refurb work to my apartment.

As I have equity in my property i would consider a top up mortgage for this however after searching the site i still am confused about this process.

1 - when topping up a mortgage eg amount €30,000 on a property with a current LTV of 50% which is on a fixed interest rate mortgage, is the new total loan amount (original mortgage amount and new top up amount) refinanced at current interest rates or is the the top up amount only affected by the latest rates?

2 - Are the only fee's asscoiated to this stamp duty and solicitors fee's and is the stamp duty based on the total value of the property ie will I be charged the maximum level of duty?

I hope this is clear.

I would also like to point out that releasing equity from an asset and transferring it into a liability is not the best option. I would get a car loan (more expensive interest rate than mortgage) on a 5 years loan. After 5 years you've paid back the loan and own the car. Now trade that car in and update to a new version with reduced payments from trade in value. Come 5 years time, you do not want to be dipping into your mortgage again. Also releasing equity on property will cause you to slip down the property ladder.

 

[avon]

Thank you for the quick responses all of them very helpful.