Sunday 15 December 2019

mortgage options

I'm re-mortgaging for a small amount to build a kitchen extension.

My main mortgage is a tracker but when I approached the bank they said I could only re-mortgage the whole lot as a new variable rate loan which is more expensive.

Can they do this and what other options do I have?

Alas, you find yourself in a common predicament as the banks continue their inexorable dilution of the tracker market. The truth is that all banks want rid of trackers at the earliest opportunity and are using every means in the book of achieving that, which includes disallowing new top-ups under existing mortgage arrangements.

Some banks however, will allow the tracker stand and offer additional funds via a standard variable loan -- you don't say which financial institution you're dealing with, but it's worth asking anyway, according to Frank Conway of Irish Mortgage Corporation.

He adds, "In some cases banks that simply never had the internal systems in place to offer this type of facility would need to re-do the entire loan structure which ultimately means a standard variable or fixed rate loan".

Your choice is limited. If you move to another bank, you won't be offered a tracker either and getting a second loan on an already mortgaged property is not feasible.

Is the amount modest enough that you could structure a personal loan via a credit union perhaps?

It is more expensive, but may be worth checking out in order to retain the tracker on the higher loan which is yours as long as the contract is not broken.

With interest rates due to start rising, you may save in the long run. Work out your numbers.

Irish Independent

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