Mortgage Top-up

[PabloD007]

Hi all,

I'm looking at options to refinance some short term debt, say about
€12000, mainly short term loans, credit card, overdraft and the like, not a lot but putting pressure on monthly finances to clear this debt, and expensive forms of short term loans. I'm considering a Mortgage top-up, is this wise for such a small amount?

I'm currently with Permanent TSB and we moved last year, hence the overrun on finances, the mortgage is currently approx 70% of house value, and repayments comfortably within our monthly income.

Should I consider Mortgage top-up or are there better ways of refinancing this amount over a shorter term?

 

[DrMoriarty]

You should first check whether your PTSB mortgage allows you to accelerate repayments so as to clear the €12K top-up in a shorter time than the existing loan term. If you top up to consolidate the €12K debt, you'll certainly be paying a much lower interest rate on that debt, but if you repay the €12K over 20 or 25 years it will cost you more in the long run.

Karl Jeacle's mortgage calculator will help you to crunch the numbers and see the effect of over-payments on the life of the loan and the total interest costs.