Mortgage Top Up? Advice greatly appreciated!

C

Caili

Registered User
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Hi,

Im hoping someone here can help me! Bought house 8 months ago, have mortgage of €276k over 35 yrs, repayments €1022 per month @ special rate of 2.69% until Nov when rate will go up to approx 4.2%, repaying €1260 per month. We also have C.U loan of 30K, paying back €650 per month over 5 years(rate is 6% i think)! As is, we are handling the 2 loans but come Nov, we will be struggling big time to pay both loans plus other bills!! I would really like to get rid of the C.U loan by topping up our mortgage by 40-50K, paying off C.U, putting 10K into the house and saving the other 10K. Repayments would be €1445 per month on 40K, €1490 on 50K! Are we crazy?? Any advice would be greatly appreciated!!
 
Re: Mortgage Top Up?? Advice greatly appreciated!!!

How much did you buy the house for and what is it worth now? What was the CU loan for?

Sarah

www.rea.ie
 
Re: Mortgage Top Up?? Advice greatly appreciated!!!

The house was bought for 300K, now worth €420-450k! C.U loan was to pay for deposit for house!
 
Re: Mortgage Top Up?? Advice greatly appreciated!!!

Well it would not make sense to borrow (was it 10k ?) to save ? You would pay a good lot more for it , than you would get by putting it in bnak or credit union.

Good idea would be to work out how much you intend to borrow, the total interest payable over the term ( 35 years or so) and then you will really see the cost of this credit. I think the bank will show you all of this if they approve you, Sarah would be able to advise on that.
 
Re: Mortgage Top Up?? Advice greatly appreciated!!!

bought a house this month in Carrigaline - how long do you have to wait before you can remortgage>
 
Re: Mortgage Top Up?? Advice greatly appreciated!!!

I think its 6 months to a year but it may be different for different lenders!
 
Re: Mortgage Top Up?? Advice greatly appreciated!!!

You could get a top up on your existing mortgage for the amount and term of the CU loan which will have it paid off at a cheaper rate but over the same period or you could remortgage to another lender and re-arrange your debt if that works out to be cheaper. I certainly wouldn't advise borrowing extra for the sake of it!

Sarah

www.rea.ie
 
Re: Mortgage Top Up?? Advice greatly appreciated!!!

I didnt know you could pay the top up over a shorter term, thats great! Ill get on to them first thing!

Thanks

:) :)
 
Caili said:
Hi,
We also have C.U loan of 30K.. I would really like to get rid of the C.U loan by topping up our mortgage by 40-50K, paying off C.U, putting 10K into the house and saving the other 10K. Are we crazy??
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yes, you are just putting yourself under more debts....Make sense to top up by 30k to pay off you CU loan on assumption you repay these 30k still in 5 years as original Cu loan, but don't top up by 40/50k...

I would feel inconfortable to have to top-up just after having taken out a mortgage 8 months ago... You need to re-assess your finance, particularly your spendings as you are not going to be able to top up every year...
 
I think that it is a good idea to top up your mortgage and repay the credit union. You should do this over the term that is remaining on the loan to avoid paying more in interest in the long run (as well as it taking 35 years to repay a loan that was originally taken out over 5).

If you really need to carry out home improvements then it would make sense to borrow to do that now instead of going back to the credit union or bank.

However, I would agree with the advice given above - don't borrow money to 'save'. Put away a set sum of money every week/month and let your savings build up.
 
Thanks for all the advice! Have been onto them about taking out enough to pay off the CU over the same term! Another percentage rate hike due early August, just to make life even harder :mad: Will probably switch to tracker as variable rate will be 4.45% come November!!! Girl on phone told me alot of people are fixing at the moment so if anyone was thinking of it, now is it the time to do it!!

Thanks again!

:)
 
Caili said:
Will probably switch to tracker as variable rate will be 4.45% come November
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If variable rate goes up following hike from EBC, tracker will also go up by same %.

Very little difference between variable and tracker other that tracker follows exactly "ECB + fixed %" while banks have more flexibility with variable (i.e. do not have to pass the full amout of increase/decrease in rate).
 
Caili said:
Girl on phone told me alot of people are fixing at the moment so if anyone was thinking of it, now is it the time to do it
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She is a salesperson, selling fixed rate mortgages. That her "advice" may be correct for your situation is beside the point--she would have said the same thing to anyone at any time.

J.
 
Scotty said:
She is a salesperson, selling fixed rate mortgages. That her "advice" may be correct for your situation is beside the point--she would have said the same thing to anyone at any time.

J.
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J,

Yes she is a salesperson but fixing now would be a good idea as theres another hike due in Aug and unless the rates are goin to decrease which is highly unlikely,the "advice" was actually good advice!!!
 
Caili said:
J,

Yes she is a salesperson but fixing now would be a good idea as theres another hike due in Aug and unless the rates are goin to decrease which is highly unlikely,the "advice" was actually good advice!!!
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It surely depends on the fixed rate and length.
 
SidTheDweeb said:
It surely depends on the fixed rate and length.
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Precisely, in fact variable/tracker rates would have to continue going up and overshoot your fixed rate in order for you to actually have saved any money.

Fixing to time the market is a mugs game. Fixing because you need the security of knowing you won't have to pay more than xxx for a given period can be sensible.

Personally i see zero point to fixing at the moment for any less than 5 years. (Please don't fix for a year or two... it's a fools move).
 
Scotty said:
That her "advice" may be correct for your situation...
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To clarify: My point was not that fixing will save you money (it may or may not; who knows?), but that, as you feel you will be struggling to match your repayments once you come off the introductory rate, fixing will give you piece of mind for the length of the term.

For example, a friend of mine fixed his mortgage for 3 years (during which time interest rates remained the same) and still feels he did the right thing even though he would have saved money had he not fixed--a young family and a stretched mortgage meant he couldn't have managed through any rate increases. Fixing allowed him to budget for 3 years, knowing there would be no nasty surprises along the way.

However, he didn't have the equity that you do, so maybe that will allow you to weather any rate increases better than a fixed rate.

J.
 
Caili said:
J,

Yes she is a salesperson but fixing now would be a good idea as theres another hike due in Aug and unless the rates are goin to decrease which is highly unlikely,the "advice" was actually good advice!!!
Click to expand...

The banks always factor in what they forsee as future rate increases in their currently offered fixed rates.

It is debatable whether Joe Public will ever beat the banks. Besides, anecdotal evidence I've noted from talking to friends/colleagues etc. seems to suggest that in the past Joe Public has always tended to fix at or near the top of the interest rate cycle, thus locking himself into a high rate when variable rates have started to level off/decrease.
 
Hmmmm! We're obviously going to have to think long and hard before we do anything, we have until November anyway! But the lender im with seems to have higher rates than other lenders so we will definitely have to shop around and move lenders if needs be!

Thanks again for all your advice!
 
Caili said:
Hmmmm! We're obviously going to have to think long and hard before we do anything, we have until November anyway! But the lender im with seems to have higher rates than other lenders so we will definitely have to shop around and move lenders if needs be!

Thanks again for all your advice!
Click to expand...

Why not switch to BoSI switcher discounted tracker, shown [broken link removed].

They give a discounted rate which is 0.55% below their standard Tracker (< =75%) of ECB +1.0% for 2 years.
 
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