Cheaper car loan using Mortgage

E

Ed30

Guest
I've heard of people getting car loans (€15-20k) using their mortgage and paying the loan off in 3-5yrs at a substantially lower interest rate. Is this common or are people just lying to the bank on the exact purpose of the loan?

If this is true it would be much better than getting a std motor loan? As anyone any experience using this method with BoI.
 
Hi Ed30, did anybody ever get back to you on this, i am wondering about the same method myself.
 
I'm sure it would be cheaper going that route - some things to consider though:

a) will you really repay the cost of the car over the 3-5 years or will it just drift into being another long term debt which will cost you a fortune in interest over 15-20 years
b) if you are remortgaging will there be legal / administrative / valuation costs that you haven't considered


Just a couple of things to consider...

Roy
 
The other key issue is which lenders will allow borrowers to use top-up funds for this or any other reason (rather than home improvements etc.) and how they police this. Also - interest on such a top-up would not qualify for owner occupier mortgage interest relief in case that's relevant.
 
Was thinking along the same lines...got graduate loan in the end...6.8% APR from BOI. Was approved over the phone for 19K in 5 minutes which is scary at how easy they will give you a loan. But less hassle than getting a valuation, organising a solicitor, getting new mortgage protection policy for higher value...all required for top up mortgage. May go down that route some time but I didn't want to remortgage yet. Also gives me an incentive to pay off the loan faster.
 
I honestly don't see how 6.8% is better than c. 3.5% (on a mortgage) over n years. Seems like a high price to pay for the incentive to clear the loan earlier.
 
I'd agree but I've had my first mortgage for less than 6 months so I don't want to remortgage straight away although I might in a couple of months.

House has gone up a little bit in value - 10K - and maybe more because they haven't been on sale for nearly a year. I got a 92% mortgage but recently got a 25 - 30% pay increase so perhaps they would consider the mortgage topup?

Why the loan...there's only so long you can go with concrete floors etc.
 
AKA said:
Why the loan...there's only so long you can go with concrete floors etc.
Click to expand...
Equally there's no onus on new home owners to fit the whole place out in one go.
 
I agree. Was able to get nearly all the furniture from family who were giving it away. Only had to buy one item of furniture and the place looks great. It's amazing what you can do recovering old chairs etc.
 
Keep your Apples and Oranges Separate......

Personally I would never touch the Homeloan.....

The Higher Interest Rate on a Motor Loan is the greatest incentive to pay it off quicker ....
 
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