split mortgage offered by bank

[dublin2014]

Hi,

We were offered split mortgage and we are strongly considering to except it. We are not still 100% sure if its the best offer. Here are our details.
Personal and income details
Income self Net income- €34,200 per annum, Permanent full time job
Income history: Permanent for 10 years

Income spouse
nature of income: None. She is sick and unable to do any work. Not likely in another 10 years

Number of children: None
Amount of Mortgage Interest Supplement received- none

Home loan Lender: (Not sure if I should provide this info)
Mortgage: €300,000
Amount outstanding: €300,000
Value of home: €125,000
Interest rate: 4.50 Variable
Monthly repayment - €1200 (interest only)
Amount in arrears - None

Other loans and creditors None
Other savings and investments None
Any other relevant information: None
Split offer: 40% (€120,000) parked at 0% interest
New monthly repayment including capital: €920

 

[Brendan Burgess]

Hi dublin

You should read this Key Post for a systematic discussion of the issue:
How to analyse an offer of a split mortgage

In summary...

Is the property suitable for your needs?
Would it cost more than €920 to rent an equivalent property?

If the answer is yes, then go for this.

Especially if it's AIB, where the warehoused amount is frozen until the end of the mortgage.

The alternative is bankruptcy and the need to find a new home.

 

[dublin2014]

Hi Brendan,

Thanks for your response.
Property is suitable for our needs.
It would cost around same to rent an equivalent property.
Warehouse amount is not frozen. They will review every 4 to 6 years to see if we can afford more.
Thanks