New loan fund for home renovations
Bank of Ireland to offer loans and mortgage top-ups to those looking to avail of new incentive to renovate their home
The Government’s home renovation incentive scheme will offer tax credits of up to €4,050. Photograph: REUTERS/Kai Pfaffenbach
Bank of Ireland is set to lend up to € 75million to homeowners seeking to avail of the Government’s new home renovation incentive scheme to make improvements to their home.
The new tax incentive scheme, which was introduced in the Budget and which came into effect on October 25th, allows consumers claim back the VAT paid on qualifying work costing over € 5,000 up to a maximum of € 30,000, completed by a registered builder. This will result in a tax credit of up to € 4,050 which will be granted in the two years after the year in which the work was carried out.
For people looking to avail of the scheme, but without the funds to do so, Bank of Ireland is to offer two different borrowing options: a personal loan over a term of up to ten years available at a rate of 9.9 per cent APR; or for Bank of Ireland Mortgage customers, a mortgage top-up spread over the longer term. If your loan-to-value is less than 75 per cent you will be able to avail of 4.4 per cent APR, rising to 4.6 per cent for LTVs above this.
According to the bank, the mortgage top-up means that a customer can improve their home to the tune of € 20,000 and spread the repayments over say 20 years for about € 125 per month. This implies a borrowing cost of about €10,000 over the 20 year period.