Need refinancing / 0.5% pepper tracker

SN9

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Hi, I'd like some advice..
Have approx 200k left on an ex Danske tracker on an ECB+0.5% rate. Yes, i know, we're really lucky! However i now need c. 100k to do some work on the house and extend. We have c. 100k in savings for a total budget c200k.
Anyone got any great ideas as to how we could finance this? Do any irish banks offer mortgages if they're the second lien? We have equity in the house of 400/500k approx.
Thank you!
 
You can remortgage the property for home improvements. Approach Pepper about this, it shouldn't be a problem
 
You can remortgage the property for home improvements. Approach Pepper about this, it shouldn't be a problem
Are you sure? They'd need to remortgage the entire so would lose tracker rate. Might be cheaper to finance the funds needed at unsecured lending rates.
I don't think Pepper are underwriting any new business?
 
Are you sure? They'd need to remortgage the entire so would lose tracker rate. Might be cheaper to finance the funds needed at unsecured lending rates.
I don't think Pepper are underwriting any new business?

Unless something has changed in the last few months, then there is definitely no opportunity to borrow additional funds, and retain your existing (former Danske Bank) Tracker rate.

Sure, you can apply to refinance the entire debt with a new lender, but you'll lose the Tracker rate, and be faced with a higher lending rate.

I also thought that Pepper stopped doing be residential lending last year, and sold their small residential loan book to Finance Ireland.
 
Might be cheaper to finance the funds needed at unsecured lending rates.

Agreed.

If the borrower happened to have another property, they might also consider using that as collateral for the new €100k requirement, to get a cheaper lending rate.

There may also be justification for selling other investments held, rather than take on new debt.
 
Have approx 200k left on an ex Danske tracker on an ECB+0.5% rate. Yes, i know, we're really lucky! However i now need c. 100k to do some work on the house and extend. We have c. 100k in savings for a total budget c200k.

So you could switch to Ulster Bank and you would be paying €300k @ 2.3% or €7,000 a year in interest.

Say you could get a credit union loan at 6%. I don't know if you could or not.

€200k@ 0.5% = €1k
€100k@ 6% = 6k
Total €7,000

How long have you left on your your Danske mortgage? If it's interest only, the above calculation will stay the same for a few years.

However, if you are paying capital and interest, you will be clearing the capital very quickly and so switching to Ulster or KBC would quickly become cheaper.

Mind you, you could probably get a CU loan now and switch to the cheapest lender later.

Brendan
 
What renovations cost 200k. Do you really need an extension.
Have you watched room to improve? Don't think any of the recent episodes have featured jobs for less than hundred thousand. All big renovation jobs now have to comply with energy efficiency standards etc
 
Thanks for the replies all. Yes im talking about an extension and attic conversion!
Probably the best bet would be the separate cu loan as we could work on paying down the capital quickly....
20 years left on mortgage and its a normal repayment mortgage, but it just wrong to move it when its so unbelievably cheap!
 
Some Credit Unions can do a secured loan as second charge on property, that would be best rate from them if you can get it but term probably limited to 10/15yrs
 
I don't know at this stage what the secured rates, it differs by credit union anyway so if you have a few in your area shop around!
 
I don't know at this stage what the secured rates, it differs by credit union anyway so if you have a few in your area shop around!

Aren't you making a big assumption here, with regards to whether or not the individual will be eligible to join a particular credit union? :)
 
For what its worth...

I would be trying to defer this project, for as long as possible, or at least looking at scaling it back.

Do you really need an extension, and an attic conversion, at the same time?

If not, your cash savings would probably cover one of the two requirements, without the need to take on any debt. Then save again for another few years, if you really want to do the second project.

If you do need more space, would a "shomra" be a cheaper viable alternative, to building an extension?

Given the impact of the coronavirus, all building projects are on hold, with some being cancelled or falling away, due to individual circumstances. The longer the financial impact of the coronavirus continues, the more that will fall away and this will ultimately lead to cheaper construction costs, when we do return to "normal".

Based on what you've told us, I think you would be nuts to forgo your Tracker Mortgage, to undertake this project, unless it's absolutely vital and you've no other choice.
 
Aren't you making a big assumption here, with regards to whether or not the individual will be eligible to join a particular credit union? :)

Which is exactly why I said IF you have a few in your area, depending where you are in the country and I always feel correctly or incorrectly most people here are city based :) then there can be overlap of CUs one might be eligible to join based on living/work area or even work related.
 
Would have hoped that a second charge would work as we have a lot of equity in the house...
Not 100% sure building prices will drop significantly, they didn't really in the last recession!
And doing two pieces of work as separate jobs doesn't make sense for us either, as we're looking at a 2 storey extension that also extends the attic space. Anyway attic extensions are relatively cheap and is probably only about 20% of the cost!
Really appreciate all of the input! Thank you all!
 
5.6% rate for a second charge might not be worth the expense (legals etc) of taking it out (relative to a good personal loan rate)
 
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