Short Term Mortgages? (eg. 3 years)

Can anyone advise on this?

Say, I have a good cash sum. But I need 50K more to get the house I want.

Ideally, I would like to borrow 50K over 3 years, at a mortgage like rate of interest. Say, for repayments of about 1400-1500 a month.

I don’t mind offering the house as collateral. Looking ahead 3 years, I am fairly confident of ability to pay back and I would have a back-up in the case of worst case eventuality.

Is this possible?

Don’t know, but if this wasn’t an option, would it be practical to get the smallest and shortest mortgage they would offer, on terms that allow penalty-free overpayment, then just pay down the difference as a lump sum after a month or two?

Your figures of repayment are High risk and not on offer in any bank on the planet.
€1500 p/m = €18000p/a x 3 years =€54000 minus €50000(desired loan) =€4000
Which would be a bank profit of 2k after admin fees.

What you want is a term loan ,or the smallest mortgage available which is €50000 from Ulster Bank but not on your above terms.
Also there is nothing to stop you paying a loan off early and save on interest other than it been a fixed term loan,so long as its lump sum repayments.

Also when you buy a house with a mortgage the house is collateral to the loan agreement unless you get a term loan seperate to the house sale.

Think 50k is generally the minimum, I know someone who was trying to get mortgage of 30k and was advised to borrow 50k on variable rate and put the additional 20k on deposit and then use it to pay down mortgage at a later stage.

Thanks for the replies.

I will look into Ulster bank’s product, thanks.

I have to say I don’t understand the perception of ‘high risk’. I would be offering a house worth (currently) 250K as collateral. And over 3 years, the risks of my employment circumstances, health etc. changing are much less than they would be over 30 years.

And handing them 4,000 euro clear for the work and risk involved seems to me more than plenty!

Anyway, if people could point in the right direction of products to look into that would be appreciated, Cheers.

EDIT - Just thinking if I offer the bank the house as collateral for a 50K loan. Does this not really enhance their balance sheet, if only for 3 years? ie. they have given out 50K. But now they have on the plus side a house currently valued at 250K.

No, it doesn’t enhance their balance sheet. If you default on the loan, they don’t just own your house. They can sell the house to cover the loan and any other costs, but any balance left over will be returned to you.

Why don’t you just borrow over a longer period and overpay? All (I think) variable rate mortgages allow for overpayments without penalty. I’ve made significant overpayments on my loan, and intend to pay it off in less than half the original term.
It gives some flexibility too, in case your circumstances change for the worse.

This is definitely not high risk to a bank. Maybe a low earner for them, but very low risk - you’ll end up paying most of the admin fees (valuation, legal and vacate deeds at the end of the mortgage). So long as you don’t go through a broker the bank doesn’t have a lot of expenses to recover apart from their own staff costs.

Phone around a few banks and you will be able to get the money, but you might need to say over 15 years to get a quote. So long as you have a variable rate you should be able to repay early without penalty (each bank have their own rules so check this) but it’s not unusual for a mortgage to be repaid over a short term. There are several properties around the country selling for under 100k and they’re not all being bought with cash so banks are used to dealing with “small value” mortgages. I know that a few years ago some banks would lend as low as 20k as a mortgage (mainly for equity releases / transfer from another bank).

If you go for a term loan you will be paying unsecured personal loan rates (9% or more), so get a mortgage is possible.

There are really only 4 phone calls you’ll have to make as nobody else is really lending; AIB / BOI / Ulster / KBC.