Top up mortgage by releasing equity - BOI

Monokne

Howdy all,

The wife and I are planning to extend our home and were considering applying for an 'equity release' top up loan from Bank Of Ireland:
https://personalbanking.bankofireland.com/borrow/mortgages/equity-release/

Our mortgage is approximately €125k and we recently had the house valued at €250k. We would be looking to borrow between 50 & 75k.

Does anyone know how easy/difficult this process is? Is it the exact same as applying for a mortgage (ie salary certs, 6 months of statements etc)? We are very good with money - have savings account of €30k due to mature in a year and have 8k in a current account, however I am concerned we may run into problems obtaining the loan as our earnings are lower than when we got the original mortgage (we've had a kid so I'm part time now) and also I've recently changed job.

Any tales of past experiences welcome, as well as any pointers or advice!

Trish56

To get a to up you will have to provide full information such as 3 months payslips, salary certificates completed by your employer, 6 months current, loan, credit card and savings statements if with bank other than BOI. The loan will be assessed on affordability which is net disposable income after taking into account stressed repayments at 6.50%. You will need to have 2k plus €250 per child after making mortgage repayments per month.

Bank of Ireland are still charging their existing customers 4.50% standard variable so it may be better for you t remortgage to another lender such as AIB who are offering 4%.

Hope the above makes sense.

Addle

Where does the €2,000 a month after mortgage repayments come from?
Is that per couple?

Monokne

I hope to god it's per person rather than per couple!

Trish56

Example - Based on joint gross earnings of 74k - net monthly income would be €4770 - stressed repayments on a mortgage of 185k over 25 years would be €1181 per month so net monthly income after stressed mortgage repayments would be €3589. Say you have 3 dependents lender would require you to have 2k for a couple plus €250 per dependent net disposable income monthly = €2,750. This application would pass affordability as the net income is €3589 per month.

Monokne wrote: »

I hope to god it's per person rather than per couple!

Monokne

Thanks Trish

Have been on to BOI today and unfortunately we aren't going to get what we need. I work part time to be with our daughter so our income is early 60's. They've offered me 40k.

I'm inclined to speak with KBC and AIB about switching the mortgage over and getting a top up with them. Even an extra 10k might be the difference.

Trish56

Hi Monokne
If you open a current account with KBC you can get a rate as low as 3.50% loan to value variable and they also pay you 2k to switch. Legal fees to switch should be approx. 1k. You will qualify for up to 3.5 times your income with KBC so should have no problem borrowing over 200k over 25 years. You can also avail of a split package by getting 125k o/s now on a shorter term and amount for home improvements over a longer term.

Best of luck.

Monokne wrote: »

Thanks Trish

Have been on to BOI today and unfortunately we aren't going to get what we need. I work part time to be with our daughter so our income is early 60's. They've offered me 40k.

I'm inclined to speak with KBC and AIB about switching the mortgage over and getting a top up with them. Even an extra 10k might be the difference.

Monokne

Thanks so much for your help Trish

Grogsy

Does anyone know of a reliable list of the type of home improvements that qualify for an equity release top up loan from Bank Of Ireland? We're trying to avoid structural improvements. We know furniture doesn't count, but we're not sure really what is, especially groundwork, for example.