EBS and AIB launch new negative equity trade up mortgages

EBS and AIB launch new negative equity trade up mortgages

The new mortgages will allow people in negative equity to move to a place more suited to their needs

EBS and AIB have announced details of a negative equity trade-up mortgage for customers who want to move to a property of greater value but whose homes are worth less than they paid for them.

Conor Pope reports in today’s Irish Times that the Negative Equity Trade Up mortgages will allow customers to sell their existing home and transfer whatever debt is left from their previous mortgage onto a new loan for a new property of greater value.

The application process involves assessing a customer’s ability to repay the higher mortgage, which will cover the negative equity on the previous mortgage as well as the mortgage on a new home.

For the portion of the overall loan used to buy the new property, standard residential new home loan-to-values (LTVs) will apply and up to 92 per cent LTV finance will be available.

Once the negative equity element is factored in, the maximum LTV will be 175 per cent of the total new loan. The maximum total mortgage loan, including the transferred negative equity debt, is being put at €700,000.

Some mortgage experts have questioned the move though. Read their opinions in today’s Irish Times.

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