Combine 2 mortgages into 1 and switch?

L

loch112

Registered User
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Hello, looking for a bit of help on the calculations to consider remortgaging and using this to pay off another small mortgage.
So roll 2 mortgages into 1 mortgage.
I would consider switching too as well to a better mortgage rate.
Longer term i would plan to pay off lump sums too against the mortgage where I can later on.
Need to consider breakage fees & associated costs as well.

Mortgage 1
€43,500 with Pepper.
Ends March 2028 so approx. 7 years left.
Tracker Rate 1.4%
Monthly payment €550
House value approx. €180,000

Mortgage 2
€109,000 with Ulster Bank
7 year fixed 3.29%; 5 years left now; then move to variable rate (3.5% currently)
Ends in 2038
Monthly payment €683
House Value €240,000

So total mortgage debt is €152,500
I would use savings to pay off €7500 and bring it down to €145,000.
to maybe get into LTV of 60%

My thought is to remortgage at €145,000 go for 15 years term.
I would either approach Ulster Bank and see what options they have on rates or else consider moving e.g. to Avant.

Does this make logical sense or am i missing something? thanks for any help or contributions. Cheers for any inputs !
 
Not sure why you would remortgage the Pepper mortgage, you'd have to give up the tracker rate.

Have you contacted UB to get the break fee on mortgage 2? I suspect it'd be fairly high, but if not then breaking and switching that mortgage for a better rate and extending its term with the new lender may make sense.
 
Hi, thanks for replies. The smaller mortgage is an investment property.
My idea was to pay off the small mortgage fully so then "I own the house" fully not the bank. Pepper mortgage ends in 2028 and the other in 2038; so just have mortgage debt on 1 house. thanks
 
loch112 said:
My idea was to pay off the small mortgage fully so then "I own the house" fully not the bank.
Click to expand...
That is the wrong way to look at it and it would cost you more money to do this. The interest on the tracker is deductible so it is effectively costing you 0.7-1.0% because you are renting. This is a lot cheaper than your PPR.

I don't think any bank would entertain topping up one mortgage to clear another anyway so the easiest thing for you to do is contact UB and move to one of their fixed rates or consider switching.
 
loch112 said:
My idea was to pay off the small mortgage fully so then "I own the house" fully not the bank.
Click to expand...

You do own the house fully :)

Pepper simply have a charge on it until you clear the mortgage.

My advice would be to leave the investment mortgage alone. After-tax rental income is presumably covering the mortgage and in 7 years you will be mortgage free. You will never get a cheaper mortgage again.

On the PPR mortgage ring up Ulster and see if you can switch and what the costs are.
 
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