I’m doing house renovations. Can you offer financial advice?
Q I’m looking to do some renovations on my house. Nothing major, some landscaping, painting and decorating etc. but I’m unsure as to how best to finance this. My bank offered me a personal loan of 50k and I presume my Credit Union would at least match that, but should I get a mortgage, and would that work out cheaper if I have to pay legal fees etc.?
For householders borrowing money for home renovations, choosing the wrong loan can cost them many thousands of euro. Despite the huge cost of not shopping around, most consumers do not seek out better value when looking for loans, mortgages, and credit cards. Don’t be afraid to shop around for the best offer.
The classic mistake made by some borrowers is to go straight to one lender when they need a mortgage – usually their banking provider. Failing to shop around, do any research yourself or visit a broker could result in ending up with a deal that the rest of the market can probably wipe the floor with.
We all know that shopping around can help us save money. But many people getting a mortgage do not compare the different offers in the market, despite differences in interest payments that can add up to tens of thousands of euros. It’s very important to get advice as lenders can charge different rates of interest, depending on the loan amount, property value, energy rating of the property and the purpose of the loan etc. Cash back may also be available and that should cover any cost involved (legal fees, valuation etc.) but read the small print and make sure it’s good value.
Getting a comparison is vital as choosing the wrong loan could add almost €20,000 to the cost of your home renovations. Rates currently start from 3.65pc for a green mortgage to well over 10pc for some personal loans. The potential difference in the cost of a €50,000 loan at 3.65pc and the same loan at 10pc works out at almost €9,000 over five years and this would be a whopping €19,536 over 10 years.
Nothing can make a greater difference to a household budget than getting the best possible value for your mortgage. It is crucial to speak to a broker as soon as possible as they can compare the market and possibly save you thousands of euro over the term of your mortgage.