Remortgaging due to separation

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Pieface

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Hi, I have a Ulster Bank tracker mortgage (ECB + 1.15%) with approximately €96000 and 8 years left to the mortgage. My husband and I are separating and I would like to buy him out. Will I be able to continue with the tracker mortgage? I have a pension from a previous employer and I think that I can withdraw from it (being over 50 years of age) to pay off the mortgage in full. I can't decide which is the better option. My savings will be wiped out with the buy out and I am one of those that take comfort is seeing a growing nest egg.
Thanks.
 
First of all don't worry too much about the tracker. It's worth about 1% a year, reducing quickly, so maybe it's worth €3,000 to you. Take it into consideration, but the other issues are much bigger.

So you need to decide if you should withdraw the pension from the previous employer. It probably does not make sense. Leave the money there growing tax-free. That is a bigger, longer term decision than trying to keep the tracker.

Ulster Bank may allow you to take over the tracker. Ask them. If your income is over €30k, they probably will. If they don't, you can take out a mortgage with them at 2.25%. So it's a pity to lose the tracker, but not a deal breaker.

Has your ex agreed to the buyout? Does he need the cash now himself? If UB refuses to allow you to move the tracker and you can't refinance it anywhere else, then you could do a deal with your ex to transfer ownership but keep the mortgage. It's messy and better to have a clean break.

Brendan
 
Thanks Brendan. I will check will UB about keeping the tracker. I rang them and they said I have to apply for a new mortgage. But I will go to a branch for specific advice. My ex wants the buyout to happen so that he can get a mortgage for his own place. I want a clean break and would prefer to take his name off the ownership and mortgage.
 
How much is the house worth?
Are you splitting it 50/50
Or is he ok with you just clearing the mortgage and keeping the house?

Brendan
 
The house is worth €400k. 45% to him. He suggested the buyout.

I am a bit puzzled by your last question. Just want to know where you are coming from in case there is something that hasn’t crossed my mind. BTW, I don’t think he cares if I continue the mortgage or clear it. His concern was that I wouldn’t buy him out as he needs the cash.
 
So just to be clear, for you to buy his 45% of the equity and clear the mortgage you will need

€135k + €96k or €231k

If Ulster gives you a mortgage of €96k , you will need €135k cash. Do you have this cash?

Or you could get a mortgage of €231k and you would need no cash.

Brendan
 
Yes I have the cash.
I would like ask if there is any tax (CGT, CAT, etc) to be paid in Transfer of Ownership due to separation scenario.
 
As per above - the family home is excluded where the transfer happens as part of the separation settlement.

There are several other aspects that need to be included however as apart of a settlement agreement - make sure you get full advice.
 
Any assets can be transfered between without tax implications as part of the separations order, it is not limited to the family home.

Second the advice to get good advice!
 
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