Top-up of mortgage

T

topup

Guest
Hi all,

When I bought my house five years ago, I got a €60K loan from my parents in addition to taking out a mortgage. I am now looking to repay the loan to my parents with some savings and a €25K top-up of my mortgage from my lender (EBS).

EBS are offering me a personal loan (Loans For Living - Lifestyle loan) at 5.9% which will add €327.32 to my mortgage repayments over the next 8 years. Although the loan will be secured on my house, it will be separate from my mortgage.

I thought it would be possible to just add €25K to my existing mortgage balance and pay the lower mortgage interest rate. Is this unreasonable? Why would EBS not offer me this option? Are there any better alternatives to taking out the personal loan with EBS at the rate above? Is I must get a personal loan, can I shop around to other lenders using my house as security?

Thanks for any advice.
 
Hi

Yes, of course you can top up your homeloan assuming the equity is there, EBS are just playing silly beggers with you by trying to force you into a higher margin product.

There are two schools of thought here btw:

A) Get a shorter term loan & pay less interst in the long term
B) Get a longer term loan on a lower rate and ease cashflow pressure

- I'd tell EBS to shag off, clearly another example of them acting for the good of their membership if they are refusing to let you top up your mortgage, when this is your preferred method & there is no good reason to refuse you.

If they give you any grief, look at switching your mortgage to a cheaper Homeloan provider, including your top up requirement & hopefully get a cheaper Homeloan rate along the way (EBS claim to be the cheapest lender on the market - all smokescreens & mirrors, when they refer to variable rate loans ... always check the cheapest rate by looking at the margin over ECB rate !)

Oh, if you do decide to leave the EBS over this issue, retain a share savings account with a minimum balance of €130 in it. Chances are, there will be a vote some day on demutualising this mutual organisation & retaining a vote may help you get a windfall ;)

Cheers

G>
 
Dont ask what they'r offering, tell them you want to top up by x amount over existing term @ mortrgage rate then over pay to avoid lower interest over longer term.
 
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