To trade up or extend?

jakehurley

Registered User
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1
Hi all,
I'm looking for steer, at a bit of a crossroads. Have a manageable mortgage on a tracker rate for past 12 years and two good incomes. There's about 90K equity in the house and we were thinking of extending. Rang the bank yesterday and they are more inclined to push us to trade up, saying it's easier to take out a bigger mortgage than a top-up?

The stats are: Owe just over 255K on a house worth about 350K. Would like to secure about 50/60k for a decent extension, but that would exceed an 80% ltv, so bank says most we could get out of them would be about 23K.

Based on our incomes, the mortgage advisor said it would nearly be easier to secure a 400K loan. They'd allow us keep the 255K at a tracker rate +1%, and the remainder at a variable rate.

This would see us take a jump in monthly repayments by an additional €1000.

Should we push ourselves to do it? Our current house needs some upgrading and I would like to have a decent wedge to do it, however, the bank is less inclined to lend a top-up.

We're caught between a rock and a hard place - don't have enough to do what we want to do with our current house - yet moving might put us under undue financial pressure.

Has anyone any advice?
 
hi, i was just looking through some post to see if there was anything similar to my own and see this is now a bit dated but...

LTV would only exceed 80% if the extension works did not add any value - the new LTV should be based on the post works valuation. if you borrow €55k to bring total mortgage up to €310k the house would need to increase in value to €387,500 - is this likely based on the additional space you'll be creating? anything over this will bring you to <80%.
 
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