re: Mortgage and Loan

Hi guys,

im struggling to figure this out!!

I have a mortgage of €266,800 first payment made on 1 May 2005 (% rate is 2.95% and paying over 40 years) Net of Trs of €133 mortgage payment is €815.

I also have a loan of €8,000 with teso (apr 7.9%) paying it over 30 months from next month at €293 per month.

Combined spend therefore €1,100 per month.

Question is this would i be better topping up the mortgage by 8k paying back the loan then pay €1,000 a month against the mortgage (thats €1,133 before trs). that would reduce the term to 30 years and

i think save me about 12k in interest....... but like i said im not sure

any help would be greatly appreciate. thanks

Unlikely you'd be allowed top up the mortgage within the first year but you're on the right track after that.

i have discussed this witht he bank and it appears if i get a valuation done as a house recently sold on the same road (€30k more than i paid last april - same spec etc) that they would top it up. another factor that helps me is that i have good job and will be fully qualified next year in this area. (basically means i will get double what i get at the moment)

The €1,100 i pay at the moment is fine. Its easily manageable. I just want my money working for me and not against me.

ps to anybody out there that thinks what did you do with 8k and think i used it to finance the purchase of a car or pay a credit card debt etc... i didn't it went towards renovations to the kitchen and a couple of other areas... so i see it as an investment hence the rationale behind me wanting to top up the mortgage.

From my calculations it would save me money in the long term. As it stands once the current 8k loan is up i was planning to bump up the mortgage payment in anyway to reduce the term

Johnny

My biggest concern with this is, The 8k loan will presumably be paid off in 3 years maybe, then that payment is gone.
If you top up the mortgage you are now paying for the car / holiday over 25 years instead. Seems liek a long time to pay for a car.

Should be reducing the mortgage if at all possible I would have thought.


Frank

johnnybegood said:

Hi guys,

im struggling to figure this out!!

I have a mortgage of €266,800 first payment made on 1 May 2005 (% rate is 2.95% and paying over 40 years) Net of Trs of €133 mortgage payment is €815.

I also have a loan of €8,000 with teso (apr 7.9%) paying it over 30 months from next month at €293 per month.

Combined spend therefore €1,100 per month.

Question is this would i be better topping up the mortgage by 8k paying back the loan then pay €1,000 a month against the mortgage (thats €1,133 before trs). that would reduce the term to 30 years and

i think save me about 12k in interest....... but like i said im not sure

any help would be greatly appreciate. thanks

Click to expand...

if the 8k was a holiday or car ,do you still want to paying for it in 2045... yes 2045.....

If you are going to top up your mortgage you would need to consider the charges for doing so. For example a completion fee, solicitors fees (its a new mortgage) valuation fee....... It might not work out cheaper.

A switcher mortgage could be your answer, Ulster Bank do a switcher mortgage and they pay the fees for you. If your LTV is less than 60% the rate is 2.85 (UFirst tracker).

Thanks for the info guys, would appreciate it if you actually read my original post.... you might have spared me the lecture concerning paying for a car over 25 years!!!

I DIDN'T BUY A CAR OR GO ON HOLIDAY IT WAS FOR RENOVATIONS TO THE HOUSE!!!! As stated in my original post

"ps to anybody out there that thinks what did you do with 8k and think i used it to finance the purchase of a car or pay a credit card debt etc... i didn't it went towards renovations to the kitchen and a couple of other areas... so i see it as an investment hence the rationale behind me wanting to top up the mortgage."

So just wanted to know should i try to top up the mortgage or not. After hearing about completion fees, solicitors fees, valuation fee (Seems excessive considering its only 8k) i think i will just stick out the 30 months of the loan term of the 8k.

In summary thanks for the advice Curiousclare and redzer....

jhegarty and frank a big 0 out of 10 for you two. It would have been good advice pity it was aimed at the total worng person!!

Two points. Firstly, theres a difference between a top-up and an additional mortgage. If your bank allows it, you may obtain a top-up which would not involve any legal or registration fees. An additional mortgage would involve those fees. Secondly, you don't have to pay for the renovations over the life of the mortgage, you could simply pay into the new bigger mortgage both the original mortgage amount plus the amount you would have paid for the personal loan- thereby overpaying the mortgage and probably repaying the top-up amount well before the life of the personal loan would have expired.