Negative equity trade down mortgage repayments

My house is worth €250,000 and mortgage is €300,000. Have an excellent tracker of .6 %. We live in dublin city, have very little disposable income and house is too small for family , so considering moving to the country for a cheaper and bigger house.

Our current mortgage repayments are about €900 per month, if I get a NE trade down mortgage with AIB interest rate will be 1.6 %.
So my question is, what is the most I could spend on a house to make a significant difference to my disposable income? E.g. Is buying a House @€150,000 + NE of €50,000 = €200,000 @ 1.6 % much better than house @ €300,000 @ .6 % ?
Thanks

300k @ .6 over 30 years is €910 per month.

200k @ 1.6% over 30 years is €700 per month.

Hi Rose

If you were in mortgage arrears, then I think that AIB would probably offer you a trade down mortgage at the current rate as part of MARP.

You can go into MARP with pre-arrears. So it might be worth telling AIB you are in trouble and ask for them to reschedule your loan. They might extend the term They might suggest a trade-down.

They should be pleased to get rid of €100k of a cheap tracker without actually charging you more on the balance.

Have you looked into the option of keeping the property as an investment and renting down the country? You would need to do the numbers, but it might work out.

Brendan

Thanks Joe and Brendan.
I was in arrears previously and entered MARP. The only resolution they offered us was to add our arrears on to the mortgage and extending the term by one year.

Do you mean that even though I am no longer in arrears that I should still fill out the MARP forms again, requesting a NE trade down?

Also I read on the AIB details about NE trade down mortgages that those in negative equity are not eligible for this product.

We can fit in this small house for another 2 years probably, would we be better doing that and paying down the negative equity or would it make much difference?
Thanks again

You should contact AIB and tell them that you are struggling. Ask for a trade down mortgage and to keep your tracker. They might oblige.

If not, you should definitely stay where you are on the cheaper rate for as long as possible. You are paying only €150 interest a month. So you are paying down €750 capital each month or about €20,000 over the next two years.

Brendan

Great thanks for your advice Brendan