HELOC

the-island-man

Anyone have experience obtaining a home equity line of credit from any Irish financial institution?

If so would you mind sharing which financial institutions offered it?

jayjay2010

the-island-man wrote: »

Anyone have experience obtaining a home equity line of credit from any Irish financial institution?

If so would you mind sharing which financial institutions offered it?

I am currently based in Toronto and they are a very popular product here. I don't believe there is anything like this in Ireland, other than a traditional Mortgage.

I guess an equity release would be the nearest thing to a HELOC (Home Equity Line of Credit) but unlike the HELOC where the money can be used for any reason, a equity release would have to be for a specific purpose (ie: home renovation etc.)

The HELOC is an amazing product, especially for acquiring new real estate.

phormium

These existed back before the recession hit, probably from late 90s to mid 2000s, there are of course still some legacy ones out there but not available to new borrowers. There were several types, probably one done by PTSB was closest to what you mean. There were other offset type mortgages which were somewhat similar too in that you could draw down more funds based against your house value and use it as you saw fit. I myself have an old offset mortgage and just recently drew down extra funds with no difficulty which are just now sitting in my linked current account until I decide if I will or won't build that extension I'm not paying any interest on the money until I spend it as the credit in the account is offset against the mortgage outstanding for interest calculation purposes. If I just paid it all back into the mortgage in the morning it would have cost me nothing extra to draw it down.

There were at least 3 providers offering something along these lines but to the best of my knowledge nothing like that exists now. Only worked for the banks when house values were consistently rising and fast! We all know how that went

Trish56

If you have an existing mortgage and switch to a new lender you can release equity.

the-island-man

I guess the purpose I would like it for is a bit different and people may find risky.

Just a bit of background. I own an investment property outright and now my wife and I are in the process of buying what will be our family home.

As Saving Accounts offer negligible interest rates here I see no point in having savings. I would like to use a HELOC secured on the investment property to reduce the mortgage principal in advance so as to reduce the cost of the mortgage over it's lifetime.

The plan would be to use my entire wages to pay down line of credit over time and then start all over again by making another balloon repayment. This could be done in the same way with a credit card but not as cost effective as with a HELOC given the lower interest rate.

phormium

Nope, that product does not exist here anymore. You could in theory have done roughly what you want with the old offset type mortgage but it wasn't available on an investment property anyway, you'd have had to take it out on the new home property. Not sure if the PTSB product was available on buy to lets but I don't think so either.

Who knows they may come back eventually as we seem to be heading back to the same style of borrowing environment! They were a brilliant idea used correctly.