ReMortgage Costs
We constantly monitors the remortgages on offer to ensure we can meet your remortgaging requirements. You should review our switch and save calculator to see what direct savings you will make on rate.
1. The upper limit on remortgages is 90% of the value of your property. This varies according to the lender.
2. As a guide you should budget in the region of €1,200 for fees involved in a remortgage. We have secured a legal partner based in cork who we have an agreement with not to extend the cost beyond this level for a basic re-mortgage.
3. A valuation fee of €130 is also payable, as the lender will require a valuation before a loan offer is issued.
4. You will need to have life cover to the value and term of your new mortgage in place, prior to draw down. Your mortgages.ie consultant will be happy to provide you with quotations from six of Ireland’s leading insurance companies.
5. Redemption penalties may arise if you are breaking a fixed rate mortgage agreement. If you want to remortgage and are in a fixed rate you will need to check with your current lender regarding any penalty payable on leaving a fixed rate – see our Customer area, document section, for a draft letter to your existing mortgage holder.
6. Currently the best value rates on offer are variable rates. However, there is a wide divergence in rates between lenders and careful consideration needs to be given to the best provider for your circumstances. Choosing the wrong lender can prove very expensive in the long term.
7. The remortgage process can normally be completed in approx three weeks. If you are remortgaging, it is worth gathering all the relevant information as quickly as possible so you can get on with the remortgage and avoid monthly payments on loans you may wish to refinance.
The changing economic environment
We have seen the implications of a changing credit environment in many areas of our daily life.Petrol and food prices have rocketed over the past year and unfortunately there is a diminishing sense of confidence in many areas.
Key lessons from the recession
- Things get better in the end
- Prices fall as well as rise
- Only borrow money if absolutely necessary
- Wages can go down as well as up
- Save for a rainy day
- Leave investment properties to people who know that business and can live with the debt
Why Remortgage?
Many Irish mortgage holders are simply paying too much on their mortgage. Invariably, somebody who is currently on a variable rate can save thousands simply by switching to a cheaper lender. However there are many other reasons to look at the equity built up in your home as a driver of investment or improvement.
1. Moving to a cheaper lender.
Maybe your lender hasn’t offered you a new rate after the end of a fixed rate deal, or maybe their interest rate (usually called the standard variable rate) is too high. You may also be interested in finding a deal that gives you more flexibility, or you may be looking for the stability of a fixed rate.
2. Debt consolidation.
Maximum €30,000 subject to debt not been >10% of the new mortgage.Care needs to be taken however, when consolidating short term debt to be aware of the additional interest charges on refinancing over a longer term.
4. Home improvements
Historically home improvements have been the driving factor behind remortgaging in Ireland. Residential home owners in the past were less adventurous in moving into either the holiday home or investment markets but were always intent on improving their principal private residence. Remortgaging is an ideal form of finance for such improvements. Again, in a reluctance to change the historic pattern, the method was to call to your own lender and get a top up loan which was usually dearer than an already dear mortgage .The remortgage market has changed this by giving you a choice when investing further in your home.
Debt Consolidation and Remortgages
Debt consolidation is used by individuals who wish to amalgamate existing mortgages and other short term debt into one new loan. Mortgages are among the cheapest forms of credit available because the loan is secured on your home.
Debt consolidation
Short term debt up to a maximum of 10% of the mortgage may be added to a new mortgage.
Debt consolidation is used by individuals who wish to amalgamate existing mortgages and other short term debt into one new loan.
The danger in debt consolidation is that, despite the lower rate of interest on the consolidated loan, you can end up paying more because the new loan lasts much longer than the original loans.
Another danger is that old habits die hard and instead of sticking to your new single debt repayment, too many people actually start borrowing short term again and wind up in the same position a number of years later.
The golden rule is to keep unsecured debt to a minimum .
For instance, a typical car or personal loan is repaid over a three to five-year period. If you consolidate this into a 20-year mortgage, the longer term means that although your monthly repayments are lower, you will pay far more in interest over the life of the loan.
Some of our mortgage lenders offer flexible repayment arrangements so that the personal loan portion of the new consolidated loan can be paid off within the original term, but at the lower rate of interest.
Please remember that the new, larger loan is secured on your home and if you fail to make payments, your home could be at risk.