Equity Release - Mortgage

nobeledygook

Basically I bought a house at a really good time and have a lot of equity in the house.

I would like to release some of this equity to help a younger sibling buy a property but with my actual bank (BOI) you can only “top up” your mortgage to use for either home renovations or for educational purposes.

Is there any way you can “switch” your mortgage to a different provider and release equity? It’s unclear on the various pillar bank websites!

Thanks

coylemj

The only way you can 'release equity' in an asset is if you sell it.

Don't kid yourself with that language which banks used up to the crash to persuade people to borrow money as if there was no tomorrow. You now want to 'release equity' in your house by borrowing money from the bank to lend to someone to help them buy a house. That someone presumably is not currently able to borrow in their own right. Probably for good reasons.

Trish56

Yes it is possible with one lender I am aware of to release equity to help a family member with a deposit for a house. How much equity do you wish to release ?

dotsman

I'd imagine that this is very simple to do when switching banks. For example, say the property is worth 400K and you currently owe 200K. I don't see why any bank would have an issue with you taking out a loan for 250K with them, releasing 50K equity. That, of course, is on the assumption that you would be able to easily make the new, higher repayments.

As for giving the money to a younger sibling, you really need to consider that a "gift" rather than a loan. If they are unable to save up the amount or borrow as it is, then chances are they are going to struggle paying you back. And your well intention-ed good deed could cause massive problems in your family. If you are able to view it as a gift in your head, then if they pay some/all of it back some day (in the distant future), brilliant; if not, you are not going to look down on them or be resentful.

Ask yourself this. If, years from now, they buy a new car, or go on a nice holiday, yet still haven't paid you back, are you going to be upset/bitter over it? If so, don't go down this road.

nobeledygook

Basically enough for a decent deposit. And yes it will be a gift. What lender was it trish?

I’m fully aware of not borrowing to fund my lifestyle!

Turkish1

dotsman wrote: »

I'd imagine that this is very simple to do when switching banks. For example, say the property is worth 400K and you currently owe 200K. I don't see why any bank would have an issue with you taking out a loan for 250K with them, releasing 50K equity. That, of course, is on the assumption that you would be able to easily make the new, higher repayments.

As for giving the money to a younger sibling, you really need to consider that a "gift" rather than a loan. If they are unable to save up the amount or borrow as it is, then chances are they are going to struggle paying you back. And your well intention-ed good deed could cause massive problems in your family. If you are able to view it as a gift in your head, then if they pay some/all of it back some day (in the distant future), brilliant; if not, you are not going to look down on them or be resentful.

Ask yourself this. If, years from now, they buy a new car, or go on a nice holiday, yet still haven't paid you back, are you going to be upset/bitter over it? If so, don't go down this road.

This is not true with my experience of switching When i was switching I intended taking extra 25k to do some small home improvements. Bank requests your mortgage statement from current bank as part of the switch and for any amount above the outstanding balance they requested quotes etc for the work being done to the house before they would finalise the switch. To be honest, was quite a pain in the ass and I ended up not doing the home improvements and have done it in stages since (delayed gratification to some extent but overall worked out well from me from financial standpoint).

SureYWouldntYa

nobeledygook wrote: »

Basically enough for a decent deposit. And yes it will be a gift. What lender was it trish?

I’m fully aware of not borrowing to fund my lifestyle!

Don't forget that you have a lifetime threshold for inheritance or gifts to your sibling of €32,500, any amount above that will be subject to a tax of 33% so don't forget that