Switching to Avant but will want a top-up next year

Interesting as my fixed term with UB is finishing next month. 3.6%, 20 years remaining, €162,000 balance and UB's value indexing calculator values the house at €404,000 (about 40% LTV) but a local valuer said we'd sell for maybe €350,000 (46%). I'm 45yo so 25 years until mandatory retirement. I live within 30km of the Co. Dublin border. Clearly a benefit of moving to a 1.95% rate.

Here's the question though. Within the next two years we are looking to extend the property significantly. If I use very rough numbers, the borrowing for the extension could be in the region of €180,000. Finger in the air would say the property may increase in value to the tune of €100,000.

Using those numbers, house value of €450,000 (using the lower of the house values) and a mortgage of €342,000. LTV of around 76%.

Anyone know what happens here with Avant? Would we pay the full 342k @ >70% LTV rate? Could we keep the initial €162k @ 1.95% and borrow the additional €180k at their >70% LTV rate?

Hi SJ

You are taking it for granted that Avant will give you the top-up.

You can't take it for granted that any lender will give you the top-up.

If you need the top-up to do the renovation, then you should probably stick with Ulster Bank and fix for 2 years.

If Ulster Bank is still in the market, they are probably more likely to give you a top-up.

If Ulster Bank pulls out of the market and sells your mortgage to a dead lender, then you should probably switch and remortgage at the same time.

Don't make life complex by switching to Avant now and then switching again.

Alternatively, apply to Avant now for the full mortgage including the top up.

Brendan

Thanks Brendan. In initial discussions with UB, they have confirmed the top up would be available to us if we were on a longer term fixed rate (longer than 2 years). I guess it's a complicated questions that probably only an Avant broker could answer.

how does the top up work - if you borrow an extra 180K you're heading towards 100% LTV before the renovations are complete.

They don't let you draw down the top up until the works progress and the value increases, they don't hand it all out at the beginning, doing extensive renovations is similar to building a house from a mortgage point of view, you draw down in stage payments.