Top up loan/Switching to interest only

A

ABC123*

Guest
Hi Guys,

Just interested in your thoughts. Currently I have a balance of €273000 left on my mortgage over 28 years. I am thinking of remortgaging to the value of 320K in order to (get married 20k, House imporvements 20K and clear a car loan)

If I was to go ahead this would mean in theory that all my 'big' saving items would be behind me and allow me to concentrate on just my mortgage. Now, the reason I am thinking interest only is because I defenitly intend to move within 3 to 5 years and the current value of my house is 370K and this is taking into account the hit the current market has imposed on the value.

Taking all of the above into account on an interest only tracker of 4.9 my monthly repayment would be apporx €1300 per month compare to my repayment as of now of €1250 per month.

Anyone think my thinking is appropriate or would advise against?
 
ABC123* said:
Just interested in your thoughts. Currently I have a balance of €273000 left on my mortgage over 28 years. I am thinking of remortgaging to the value of 320K in order to (get married 20k, House imporvements 20K and clear a car loan)
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What is the value of the property?

Remember that you could end up paying for your wedding and car over 28 years unless you take specific steps to accelerate repayment of the topup or at least the wedding/car portions. This could be much more costly in the long run than an unsecured personal loan scheduled over a couple of years.

You may need additional/new mortgage protection life assurance if your existing policy will not cover €320K or whatever.
Now, the reason I am thinking interest only
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Are you sure that your lender (or any lender) will be amenable to you topping up AND going interest only?
 
Current value of the property is 360K and that would be conserative, I plan to use 20K of the top to reinvest into the house itself
 
What you're proposing appears possible asuming your income qualifies you for €320,000.

Interest-only is also possible. Whether or not it's wise is a different question. If you go interest-only, you're enjoying lower repayments now but you'll owe more when you eventually sell the house. So you're enjoying some of the benefits now but they come at a cost.

If you go annuity mortgage now, you can still tidy up your finances as you propose, but when you eventually sell the house, you'll have paid off some of the loan and will therefore have a bigger deposit towards your next place.

You say your repayment is currently around €1,250. Is that including or excluding the car loan repayments, which you're taking out? Why don't you look at an annuity mortgage with repayments of (€1,250 + current car loan repayments)?
 
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