Hi there, not sure what’s the best option for me and wld be grateful for advice. Plan to do attic conversion before Xmas. Going to cost approx 30k as hipped roof to be changed. Not sure whether to apply for mortgage top up Or get personal loan? Thing is I more than likely will clear the top up/ loan I get now as have savings of that amount maturing from bond in 2 years time. A personal loan for that amount will make things quite tight for me as shorter term plus have car loan of 350 pm also aswell as my mortgage. Should I apply for top up mortgage and consolidate the car loan into it so monthly outgoings more manageable or will that mean I’m paying tons of interest for 2 years losing what I got in the savings bond? All advice welcome. Thanks in advance
Top up mortgage or get personal loan?
- Thread starter Deedum
- Start date
The top up will more than likely be a cheaper interest rate than the personal loan so for that reason that is what I would go for. Only extra cost is you will probably need life cover. Paper work wise a personal loan might be easier so it depends a bit on your circumstances and details of the work, planning required etc?
Unlikely a bank will let you consolidate a car loan into a top up these days.
You can still pay off the top up when the bond matures provided you are in a variable rate (you can still pay it off if fixed but might be a penalty)
If the top up rate is lower than the personal rate then you will pay less in interest. The term on the top up can be different to the existing mortgage once it's not longer or you can just take it for the same term as mortgage and overpay each month if you have it or just clear it when bond matures.
Unlikely a bank will let you consolidate a car loan into a top up these days.
You can still pay off the top up when the bond matures provided you are in a variable rate (you can still pay it off if fixed but might be a penalty)
If the top up rate is lower than the personal rate then you will pay less in interest. The term on the top up can be different to the existing mortgage once it's not longer or you can just take it for the same term as mortgage and overpay each month if you have it or just clear it when bond matures.
NoRegretsCoyote
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My experience with BoI when I asked about top up was that they would need about €1000 worth of reports at various stages to sign off on release of funds.
For your budget a personal loan might be a simpler option.
For your budget a personal loan might be a simpler option.
Brendan Burgess
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I shake my head in frustration when I see these stories.
Why do people lock away their money when their financial future is uncertain?
The first thing to do is to check with whomever issued the bond if it's possible to cash the bond early without penalty.
The second thing to do is to ask yourself whether you can defer the work on your attic until the bond matures.
A credit union might give you that loan. Rates vary - the Health Services Credit Union charges 5% while my Credit Union, Capital, charges 8%.
8% of €30,00 is €2,400 a year. What return are you getting on your bond? And what would the early encashment penalty be?
What rate of interest are you paying on the car loan?
Brendan
Agree with Brendan. If things are going to be tight then wait until you can afford it if possible.
Thanks for all advice. Bond is high interest Return so don’t want to cash in early (10 year an post solidarity taken out back when rates were good). Car loan 7.9pc. Credit union sounding like good option to save the paper work with top up from what you saying. Plenty to think about
Hi deedum, I was in exact same position as you 2 years ago. I done a attic extension and cashflow was tight. First things first you say it's going to cost 30k. I'm telling you now it will be closer to 40k by time you are finished. I had budget of 25k and used plenty of friends in trade and it cost me closer to 40k and price of material has gone through roof the last 6 months timber steel etc. This is how I funded it 5k savings- 5k interest free loan from family-20k advantcard personal loan 5.9% over 5 years- I also put 10k on a new credit card interest free for 12 months. I still didnt have the funds to pay credit card after 12 months so.just rolled it into new card interest free for another 12 months. Cashflow has been much better this year so cleared the credit card that I had for 24 months interest free and paid back family member. In total I funded 35k personal loan over 5 years on little above 3%APR so just a little above my mortgage rate. Best of luck with attic it's well worth the extra cost.
Brendan Burgess
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Is this the product
So if you invested €100, and cash it today after 8 years , you will get €108
If you wait two years, you will get €135.
So that is a return over the next two years of 11%. Yeah, you have to hang on to it.
Brendan
Why did you not use your savings to pay for the car?
I think you'd be mad to borrow more money when things are already tight for you. I suggest you need a money makeover to see what else is wrong.
Yes Brendan that’s the one so definitely won’t be cashing in . Shame these rates long gone
Tks for reply. Had good bit of equity in previous car which carried into this deal. 2 years left on this but need additional space now... defeats purpose if I wait 2 years to do if u follow
Thanks for reply and suggestions. Brave move to take out credit cards but great it worked out well for u. Good discipline!! Might do that if I go over my budget