Moving from KBC - can I remortgage to 80% of value?

brianc89

I bought in 2018 and my mortgage is with KBC. As they are leaving the market, I need to remortgage.

My house is in serious need of renovation and modernising. I can afford a higher mortgage and the bank will give me up to c. 100-120k. I would like to keep within 80-100k spend. HOWEVER, I am finding it extremely challenging to find a builder / contractor to commit to my job. They are flat out busy and a lot of them won't take jobs less than 150-200k.

My question, can I simply remortgage my house up to 80% of its current '2022' value and use this money to give me flexibility. This way, I can find tradesmen ad-hoc, organise windows, insulation etc rather than pay a contractor for a massive job ...

awec

Yes, this is possible, it's called equity release. But you should get some proper financial advice on this.

Regarding using the money to go direct labour on your renovation instead of hiring a contractor, again you will need to think very carefully about this, unless you are very competent and very certain you know what you are doing this could be a very expensive mistake to make. Remember managing a site is a full time job, too many people think it's just making a few phone calls here and there to book trades.

brianc89

Hey thanks for responding and advice. I'm from a family full of tradesmen so I have some contacts and a good general knowledge. It's "only" an 80k job after all. It goes NOWHERE these days.

I searched for 'equity release' and found info on CPCC. It says that an Equity Release scheme only applies to people without a mortgage, over a certain age such as 60. You are agreeing to sell the house upon your death and pay back the bank at this stage (no repayments before).

CPCC also says that Mortgage Top-up is what I need. I've set up a meeting with my bank to discuss in more detail.

My main issue is that I can't find a contractor to fill out a budget form (for the bank), let alone commit to signing a contract for work. I'm under some time pressure as I'm considering moving job, so I'm hoping the bank will agree to a top-up without requiring a contract of works.

https://www.ccpc.ie/consumers/money/mortgages/equity-release/

https://www.ccpc.ie/consumers/money/mortgages/changing-your-mortgage/mortgage-top-up/

Claw Hammer

You may well be able to arrange a higher mortgage with delayed drawdown.

You get mortgage approval but only draw down enough to clear your existing mortgage with the ability to draw down the balance as needed. You would be better to explain to the new bank that you have some home improvement projects in mind such a new windows , new heating cobblelock etc. Get a few written estimates. Avoid saying the house needs a total refurb.

eusap

Yes you can remortgage your house up to 80% of the value, some banks may go 90% BUT its not about the % its about the repayments. If you own a 1million euro home a bank wont give you a 800k mortgage if you earn 40k per year. The affordability of the mortgage is what you need to check

brianc89

Thanks all for responses. I had my call just now with AIB. The process is clearer and more straightforward than I anticipated.

AIB's general rule is - they will give up to 75k for renovations and this can be self-certified. Anything over this requires builders / engineers to sign off and the loan will be given in tranches. Any amount they give is, of course, subject to their lending and affordability rules.

There was no specific mention of LTV. Assuming you don't go higher than 80% (second time buyer, remortgage), the LTV is only really important for the interest rate you receive.