AIB Topup mortgage - how does it work

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Merowig

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Hi
how does it work with a topup mortgage with AIB.
Is it a seperate mortgage (my preference) or will the amount be added to the other mortgage?
thanks
Merowig
 
I’m not sure what the norm is but in my case when I topped up my mortgage 4 years ago they gave me a second mortgage with a new account for the extra amount with a different rate
 
rustbucket said:
I’m not sure what the norm is but in my case when I topped up my mortgage 4 years ago they gave me a second mortgage with a new account for the extra amount with a different rate
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Thanks
how long did it took from application to receiving it?
 
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rustbucket said:
I’m not sure what the norm is but in my case when I topped up my mortgage 4 years ago they gave me a second mortgage with a new account for the extra amount with a different rate
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does the application require a full set of documents in the same manner as a new application or a switch? I was looking to borrow for 50K for an extension and was just curious.
 
Also is a lawyer required? The bank already has the deeds so I would imagine not needed.
 
Don't know AIB procedure but most bank top ups to mortgages are always by way of separate loan that runs alongside the main mortgage for the remaining term of it. Most have a limit to what can be done as a top up, UB used to be 65k. When it's below the limit they can do it quickly without too much fuss and not needing legal work. The new top up part is at today's mortgage rates whereas someone may have a tracker/fixed on the original loan so two different rates and payments but normally same day per month.

If it were to be added or incorporated in original mortgage it would require a remortgage and has to be done that way if over their top up limit, this also requires a solicitor.

Borrowing for home improvements will require quotations/estimates and depending on the loan to value of house this would normally just be issued but if you are doing an extension this might complicate it as they will probably want planning if applicable and compliance with regs etc, might also mean stage payments of the amount depending on values etc.
 
I can’t remember exactly what was involved but I don’t think it was the same amount of docs required

From memory we just had to update our circumstances (jobs, salary etc)

We also had to update our house insurance and life cover before they would release any funds.

As ours was for building work we also had to provide them quotations for the work and get a house valuation done estimating what the value would be once work was completed.

AIB only released the extra funds in tranches also
 
We were in talking to AIB the other day for the same reason. It's a separate mortgage. You will need similar documentation to your original application.

As above they release it in stages. They said that you can only fix when all the money has been drawn down. Will need a valuation done, costings template filled in etc. We're putting up around half the cost ourselves and they said we need to exhaust our own share of it first before drawing down the AIB money. Which means we can only fix around March next year when we hope the work is finished.

Makes me think it'll be easier to just go to the CU and pay it back over 8 or 9 years.
 
The Oggster said:
Makes me think it'll be easier to just go to the CU and pay it back over 8 or 9 years.
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Easier no doubt but more expensive I presume, what is the CU rate for this sort of borrowing? You could always go to the hassle of taking the top up and picking a term of 8/9yrs on that, be finished quicker and cheaper assuming mortgage rate is a lot less than CU personal loan rate.
 
The CU home improvement rate is 6.9%. Last year they gave a rebate of 6.5% of interest paid.

You're right in that it's just easier. With a top up I think we'll be paying around €480 a month plus €813 on our main mortgage. Which makes it very affordable for us. I would hope we will get a good fixed rate which allows us to over pay like our current situation. Their fixed rate could be up around 3.5% by the time we draw down the last of it and fix.

Paying 6.9% with CU for 8 years would be €1,086 a month which would still be affordable. The rebate if it was the same rate again would be €286 for the first year so not a huge amount.

We'll probably just go ahead with the top up over 20 years but overpay when allowed.
 
Mods - please delete if not allowed.
This thread poses interesting question.
Are there any key threads outlining this process across various lenders?
It would possibly be sonething to consider when drawing down or moving lender.
It might be helpful to have the steps in a key post.
List of generic steps and how the process differs would be really insightful.
 
Hey
I'm bringing up an old post as the last message asked some interesting questions but unfortunately never got a response.

The really interesting question for me, is are the rules any different if you doing a switcher? Say I was switching anyway to another bank, can I just apply for a single new mortgage with that bank, where the new mortgage is covering the Old mortgage but also pieces for renovation or an extension that would have to be drawn down in stages?

Even when you're switching would you need two new mortgages? I don't think that would make much sense.

Thanks for any words of wisdom
 
I switched last year from KBC to AIB and included a top up amount as part of the request to fund a new extension. As we were switching it was treated as a brand new application so full documentation, solicitor etc. We drew down the "switching" funds first to clear the KBC mortgage however as stated above could only draw down the top up element in tranches with engineers certs. We had the choice of having two separate loan accounts or all rolled into one. Technically we could have fixed the first tranche on a standard rate and kept the second on a variable until all drawn down but we were aiming for a green rate so couldn't fix until all funds were drawn down and a new BER carried out. Got a B2 rating so managed to nab the old 2.15% green rate for 5 years on the very last day before the first rate increase in October. Good luck!
 
@Joe Smith AIB's treatment of topups seems very fair. As @Mandub says, if you use the topup to do works that improve your BER to B3 or better, you have the option to switch to AIB's green interest rate. (However, it may not make sense to do that if their rates have increased by the time you get the work done.)

Similarly, if the topup takes your mortgage balance above €250k, you become eligible for lower AIB rates. See the tables, and the notes below them, in this thread:

Best Buy - Which lenders have the lowest mortgage rates? (Updated April 2023)

While I wrote the original post on this, Paul F has edited it and made it far easier to read and has kept it updated. Brendan You (or your broker) should apply to two or three of the cheapest lenders simultaneously. It might take some time for your loan offer to materialise, and today's Best...
www.askaboutmoney.com
 
Joe Smith said:
Thanks, that's good to know
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No problem. I should add that the max amount we could apply for had to be max 80% of the value of the property given its treated as a second time application. So we had to get a valuation done at the start with the current value and estimated value when works were complete. AIB could proceed on that basis however they hold back the final 10% until another valuation confirms the increased valuation once works are complete. It’s usually the same valuer that does both so I believe it’s rare the amounts would differ.
 
Mandub said:
No problem. I should add that the max amount we could apply for had to be max 80% of the value of the property given its treated as a second time application.
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I wonder if AIB will now allow this to be 90% of the value of the property – the new Central Bank rules mean that non-First-Time-Buyers only need a 10% deposit.

But of course AIB might still decide to keep their own rule that limits the topped-up mortgage balance to 80% of the value of the property.
 
Paul F said:
I wonder if AIB will now allow this to be 90% of the value of the property – the new Central Bank rules mean that non-First-Time-Buyers only need a 10% deposit.

But of course AIB might still decide to keep their own rule that limits the topped-up mortgage balance to 80% of the value of the property.
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Good point. The 90% would obviously give more flexibility to borrow more but limiting to 80% also provides a decent buffer if prices start to fall!
 
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