The amount that can be borrowed is based on the difference between the existing balance of the mortgage and the current market value of the property.īOI offers an equity-release loan. The EBS also has a range of top-up loans for customers with a range of tiered interest rates. The minimum loan is €2,500 and the maximum is €65,000, provided this does not exceed 80% of the property value. It offers an attractive array of home loan restructuring options where the term can be split for different parts of the loan.įirst Active recently launched Utopia, a refinancing package where borrowers can pay back short-term loans at mortgage rates and can arrange additional borrowings against the value of their home. ![]() ![]() While perhaps not as well known as some of the other lenders as it doesnt have a branch network, IIB Homeloans specialises in providing loans through a network of intermediaries. It would however make sense to structure such a loan through a mortgage facility over an appropriate short-term as against using a normal personal or term loan. Equally it is not wise to repay a car loan over 10 years if the asset will depreciate over five years. It would be futile to write a cheque for €5,000 for a holiday and repay it over a period of five years. To reap the rewards of such lower lending rates, borrowers must be responsible. Borrowings from the OnePlan holding account can be repaid over any term between five and 25 years it does not have to be the same period as the mortgage. OnePlan chequebooks are issued to customers and cheques can be issued or amounts withdrawn subject to a recommended minimum of €3,000. Permanent TSB recently launched OnePlan, which allows mortgage holders to establish a line of credit of up to 75% of the value of their home, access the amount of finance they require, when they require it, at the prevailing mortgage rate and repay it back as they wish. Remember there is no point in halving the interest rate on a car loan if you have to pay the loan back over a much longer period. In the past lenders did not always make this easy and some still dont. The trick is to be able to access the money at the cheaper rate but also to be able to pay it back over a short-term. The key advantage to raising finance through a mortgage rather than a term loan is that interest rates are normally half typical term rates and less than a quarter of typical credit card rates. This is not a new concept but with the emergence of Permanent TSB, competition in the banking sector has stepped up a gear and has raised awareness of the idea of people raising finance through their mortgage, at a lower rate. ![]() The idea of borrowing additional money through a mortgage may be referred to as a chequebook mortgage, loan restructuring, refinancing, remortgaging etc. It is prudent to borrow sensibly and also to save at the same time. For example, it would not be wise to borrow €2,000 through a credit card at possibly 19% APR and then repay it over two years. However, it is preferable to pay for short-term expenses through savings. Sensible borrowing can allow us to experience a better standard of living. The cost of borrowing increases significantly when the interest rate on a typical mortgage is compared to that on a term loan or even worse on a credit card.ĭebt is not a bad thing as long as it is managed well. As I am planning some home improvements and also want to change my car this year, I will need to borrow some money.
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