Irish Independent: Can we include cost of renovations in amount that we can borrow?

By Charlie Weston, Irish Independent

Q My husband and I have our eye on a nice ‘fixer-upper’ for €120,000. It’s a bit of a project and needs about €100,000 to bring it up to scratch. We wonder how much can we borrow as second time buyers? Is it 80pc of the sale price, or 80pc of the house plus the cost of renovation works?

A As second-time borrowers you can borrow up to 80pc of the value of the home, according to head of credit at MyMortgages.ie Joey Sheahan. If you propose to spend in the region of €100,000 on construction, for example, you can borrow 80pc of the cost of the works once the value of the property increases by the amount of the works. Therefore, if you are keen on the house from your viewings, get an engineer, architect or quantity surveyor to cost the works.

Read More: https://www.independent.ie/business/personal-finance/can-we-include-cost-of-renovations-in-amount-that-we-can-borrow-40322200.html

New figures from the Central Bank show the average interest rate for new mortgages in Ireland is 2.79%

Ireland had the second highest rate in December but overtook Greece in January.

The average rate in the EU is 1.29%.

Joey Sheahan of MyMortgages.ie says while the difference in rates may seem small, it is significant:

“1% difference in your mortgage could be as much as 57,000 interest over the term, so if you have a 300,000 mortgage over 30 years that can be the difference of up to 57,000 over that term.”

Source: https://www.redfm.ie/news/cork/ireland-is-once-again-the-most-expensive-country-in-the-eurozone-to-take-out-a-mortgage/?cmpredirect