AIB equity release refused - switched to Pepper and got 3.3%!

E

ecto_1

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Background:
€370k AIB Variable Rate Mortgage drawn down 36 months ago for a €475k house (~78% LTV) originally at 4.29% and various rate reductions have that now down at 3.30%.
Due to a combination of disliking debt and a desire to get the LTV down I have been aggressively overpaying and the balance is now €202k (~€145k ahead of schedule).
If I were to keep going I should be able to clear the remaining balance within 2 years.

However my brother and I have realised that we want to help my mum improve her quality of life and part of that plan is to purchase a house for her to live in. To make the process easier and avoid a joint mortgage we agreed to make it a cash purchase and get the funds from equity release or similar on our own houses.

I went in to meet the Mortgage person in my local branch today to enquire about getting the overpayments back via an equity release expecting this to be an easy conversation since I am an existing low risk customer offering to pay them a bunch more interest but they basically declined my business. They did offer to let me apply for a Buy To Let mortgage at a 50% higher interest rate but that seems like a bad deal to me.

Is there a way to ask AIB for this that will make them more likely to say Yes?

Alternatively if I switch lender are they likely to allow me to release cash as part of the process?
 
Aib give a 50k home improvement loan without many questions... you could also switch provider and in essence remortgage to release some equity.. equity release isn't a popular term at the moment
 
Banks don't allow equity release due to people using long term debt to fund their lifestyles back during the Celtic Tiger.

Your best bet is Pepper Homeloans who will allow equity release for the purpose of an additional property.


Steven
www.bluewaterfp.ie
 
Just a quick note to say that in the end we went with Pepper - AIB did a lot of navel gazing before deciding that no they really would like me to pay them 4.85% as a buy to let.

Pepper matched AIB's LTV rate of 3.3% (<80% LTV).
 
It's interesting to see where Pepper are with interest rates. They're seen as a 'near prime' lender, but up to the latest rate reductions from AIB they were matching the best variable rate in the market at 3.1% for <50% LTV.

It'll be interesting to see if they reduce rates again now and stay in competition for that business and retain the flexibility that the banks are refusing to provide.
 
Ecto

That is a great story and I have edited the title to reflect the outcome as it will be helpful to others.

I had not realised that Pepper quote their rates on their website?

https://www.peppermoney.ie/im-paye-worker/

Do you have any idea what their policy is about treating existing customers fairly? In other words, if they reduce rates, will they pass on rate cuts to you or will you be stuck on this rate?

The mad thing is that you could probably switch back to AIB on their lower rate and get cash back.

Brendan
 
ecto_1 said:
Just a quick note to say that in the end we went with Pepper - AIB did a lot of navel gazing before deciding that no they really would like me to pay them 4.85% as a buy to let.

Pepper matched AIB's LTV rate of 3.3% (<80% LTV).
Click to expand...
So is it a buy to let? If so then how did Pepper come up with that rate as is 4.1% plus for BTL?
 
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