Switching Mortgages?

Hani Kosti

Your best bet is to get under 80% LTV and possibly review the term.
We went from 81.5% to 80% (we're hoping to save the difference between the application and drawdown or ask parents to help us and pay back) and from 33 years to 30. The payment difference was minimal yet saving over 50k in overall repayment.
Shop around, it's worth it

PhoenixParker

James Bond Junior wrote: »

KBC wouldn't entertain me and would rather have lost a customer than drop the rate.

They have a simple procedure in place available to all existing customers since about December.

There's a one page form which is basically what's your name, address and account number. Then you need to get a valuer out which is one quick phone call. Takes about an hour of your time in total. I did it before Christmas using the same valuer who did it when we got the mortgage.

It's a nuisance in some ways because you need the valuation but for us that worked out better as the valuation went up and the LTV down. We dropped to 2.9. With another lender there'd have been no valuation so we'd still be in the +80% bracket.

mickoneill31

PhoenixParker wrote: »

With another lender there'd have been no valuation so we'd still be in the +80% bracket.

I agree with all of your post except that bit. You can always get a valuation. I presume the validation wasn't free.

Some (maybe most) other lenders do drop you down when your LTV changes. KBC are catching up. They should be as I presume there was a bit of an exodus last year.

I've applied to drop down with ulster bank as my LTV should be below 60% now. He told me no valuation is needed if it's obvious.

VW 1

Just looking to draw on the experience of others on this one.

Currently 8 months into a 35 year mortgage of X with EBS at a variable rate of 3.7%.

Looking to switch, most likely to BOI due to their 2% cash back upfront, as well as a further 1% at the end of a 3 year fix if you are a BOI customer. The interest rate on the 3 year fix is 3.1% and will reduce our current payment by circa 10%.

The plan is to also take out additional funds for home improvements, about 5-8% of the mortgage.

Is the best way to go about this to add it in a lump onto the mortgage, or would it be cheaper in the long run to take it as a personal loan over say 3 years? My thinking is that if our payment drops by around 10%, but we add something similar onto the capital of the mortgage, our payment monthly will come out roughly the same but we will have the 2% cash back along with the extra amount taken out on the mortgage as a lump sum for home improvements.

It sounds too easy.

PhoenixParker

mickoneill31 wrote: »

I agree with all of your post except that bit. You can always get a valuation. I presume the validation wasn't free.

Some (maybe most) other lenders do drop you down when your LTV changes. KBC are catching up. They should be as I presume there was a bit of an exodus last year.

I've applied to drop down with ulster bank as my LTV should be below 60% now. He told me no valuation is needed if it's obvious.

In our case there was no way I'd have bothered with a valuation as we were in the property less then six months.

I'll grant you that it's awkward compared with other lenders who do it automatically but kbc also have good rates.

The form and details are here for anyone who's interested:
https://www.kbc.ie/our-products/mortgages/existing-customers/pdh-offer

bunderoon

I'm wondering what do to myself.

We've a mortgage of 91K and the house would be worth 140,000. 26 years left of a 30 year mortgage.
Would want to top it up by 20K for final renovations. (Ground Works etc)
Current pay ~500 per month (4.5% with BOI).

Have current accounts with BOI aswell as insurance.

Either switch provider but don't want the hassle or with the LTV we have, apply with BOI for the 20K and also go to a 3 year fixed @ 3.10%. But what then after 3 years?

Texted the BOI manager and he's happy to talk, but before I do, is there a better offer out there that I am missing?

Thanks in advance.
B.

James Bond Junior

bunderoon wrote: »

I'm wondering what do to myself.

We've a mortgage of 91K and the house would be worth 140,000. 26 years left of a 30 year mortgage.
Would want to top it up by 20K for final renovations. (Ground Works etc)
Current pay ~500 per month (4.5% with BOI).

Have current accounts with BOI aswell as insurance.

Either switch provider but don't want the hassle or with the LTV we have, apply with BOI for the 20K and also go to a 3 year fixed @ 3.10%. But what then after 3 years?

Texted the BOI manager and he's happy to talk, but before I do, is there a better offer out there that I am missing?

Thanks in advance.
B.

My figures are roughly the same and my move from kbc to UB gave me the options to reduce by 3 years and maintain the same rate or reduce the rate and maintain the term. Would a switch to bring down your repayments and then a personal loan work or a mix of both work for you? It would cost less than putting renovations on the mortgage. I used a credit union loan over 4 years for the renovations and it worked out much cheaper.

bunderoon

James Bond Junior wrote: »

My figures are roughly the same and my move from kbc to UB gave me the options to reduce by 3 years and maintain the same rate or reduce the rate and maintain the term. Would a switch to bring down your repayments and then a personal loan work or a mix of both work for you? It would cost less than putting renovations on the mortgage. I used a credit union loan over 4 years for the renovations and it worked out much cheaper.

I rang the BM and he backed up what the output from bonkers.ie gave me.

Basically, if nothing else, he said to switch to a fixed rate from variable 4.5% to fixed 3.10% will reduce the monthly repayments by 75euro. So 425e per month. I dont think there is any point (I could be wrong here) in reducing the mortgage term yet as I can see myself either moving lenders or availing new offers in a 3 years time - as long as the bubble doesn't burst before that.

Or borrow the 20K (brings the mortgage up to 110,000) which increases the monthly payments to 513 euro @ 3.10% and adds 8K to overall interest.

The Credit Union route is an 'interest'ing idea. Pay more in the short term and be done with it quicker. I'll look in to this actually.

Thanks a million.

James Bond Junior

bunderoon wrote: »

I rang the BM and he backed up what the output from bonkers.ie gave me.

Basically, if nothing else, he said to switch to a fixed rate from variable 4.5% to fixed 3.10% will reduce the monthly repayments by 75euro. So 425e per month. I dont think there is any point (I could be wrong here) in reducing the mortgage term yet as I can see myself either moving lenders or availing new offers in a 3 years time - as long as the bubble doesn't burst before that.

Or borrow the 20K (brings the mortgage up to 110,000) which increases the monthly payments to 513 euro @ 3.10% and adds 8K to overall interest.

The Credit Union route is an 'interest'ing idea. Pay more in the short term and be done with it quicker. I'll look in to this actually.

Thanks a million.

Credit union interest @ 7.5% will probably be in the region of 4 k and you could spread it over 5 years at about €400 a month but you would save 4K in mortgage interest and be paying €325 more than you currently are. If the figures are doable it's a no brainer in my book.

wordofwarning

bunderoon wrote: »

I rang the BM and he backed up what the output from bonkers.ie gave me.

Basically, if nothing else, he said to switch to a fixed rate from variable 4.5% to fixed 3.10% will reduce the monthly repayments by 75euro. So 425e per month. I dont think there is any point (I could be wrong here) in reducing the mortgage term yet as I can see myself either moving lenders or availing new offers in a 3 years time - as long as the bubble doesn't burst before that.

Or borrow the 20K (brings the mortgage up to 110,000) which increases the monthly payments to 513 euro @ 3.10% and adds 8K to overall interest.

The Credit Union route is an 'interest'ing idea. Pay more in the short term and be done with it quicker. I'll look in to this actually.

Thanks a million.

BOI is the worst bank to be with as a variable cost. They are only admitting, they want customers to be on a fixed rate. So their variable rates are high to encourage customers to go a fixed rate. A fixed rate benefits them, as they know if you are 3 years fixed that in 18 months all their fixed mortgages will require x amount of capital. This allows them certainty and ability to forecast.

A non-bank money lender wants to get into the industry and be super competitive on variable rate/fixed rates. I imagine banks were trying to lock customers into fixed rates there is some competition building in the industry.

I agree with the other poster on the idea of a CU loan. As a rough guide, you should only borrow for the period of time you intend to have the item ie you don't put a holiday or a car on a mortgage. It sounds made, but people did during the boom

If you pay more for a CU loan. There is the added flexibility to pay it off sooner. I know you can do that on a variable loan too. But not on a fixed.

Would you switch to KBC or AIB? AIB is better (or it is either EBS or Haven) although more expensive, pass on variable cuts to existing customer. Whereas KBC don't always

Switching a mortgage is not that difficult or time consuming. It is only a few hours of work. It is mainly waiting for the banks to slowly process it

bunderoon

James Bond Junior wrote: »

Credit union interest @ 7.5% will probably be in the region of 4 k and you could spread it over 5 years at about €400 a month but you would save 4K in mortgage interest and be paying €325 more than you currently are. If the figures are doable it's a no brainer in my book.

Thanks for that.
Actually, it looks like the 20K would need about 6K lodged into a CU. Which we wouldn't be prepared to do at the moment. Also then 4 years of a hit with the mortgage of 425e plus a CU loan (for 4 years) of €325. It's manageable, but I think the best route would be to top up the mortgage as it's just 13 euro extra (due to 3.1%) a month and then revisit this in a year or two and start to pay additional small lump sums of mortgage when things settle down for us.
The top up is for home improvements etc. Wont be going on a holiday / car

bunderoon

wordofwarning wrote: »

BOI is the worst bank to be with as a variable cost. They are only admitting, they want customers to be on a fixed rate. So their variable rates are high to encourage customers to go a fixed rate. A fixed rate benefits them, as they know if you are 3 years fixed that in 18 months all their fixed mortgages will require x amount of capital. This allows them certainty and ability to forecast.

A non-bank money lender wants to get into the industry and be super competitive on variable rate/fixed rates. I imagine banks were trying to lock customers into fixed rates there is some competition building in the industry.

I agree with the other poster on the idea of a CU loan. As a rough guide, you should only borrow for the period of time you intend to have the item ie you don't put a holiday or a car on a mortgage. It sounds made, but people did during the boom

If you pay more for a CU loan. There is the added flexibility to pay it off sooner. I know you can do that on a variable loan too. But not on a fixed.

Would you switch to KBC or AIB? AIB is better (or it is either EBS or Haven) although more expensive, pass on variable cuts to existing customer. Whereas KBC don't always

Switching a mortgage is not that difficult or time consuming. It is only a few hours of work. It is mainly waiting for the banks to slowly process it

RE- Switching -> We have separate and a joint account with BOI.
I read that the banks drag out the process (for their reasons) to a few months. That's the hassle that we can do without. I would like to get the home improvements done this summer.

As a note
Just checked there and KBC are offering 3k to change and also 3 year fixed is 2.99%. Legal fees shouldnt be more than 1k.
But unsure about KBC's future in Ireland and AIB's Fixed it 3.5% and Var is the same.

Thanks guys, I think I know what I'm going to do.

James Bond Junior

bunderoon wrote: »

RE- Switching -> We have separate and a joint account with BOI.
I read that the banks drag out the process (for their reasons) to a few months. That's the hassle that we can do without. I would like to get the home improvements done this summer.

As a note
Just checked there and KBC are offering 3k to change and also 3 year fixed is 2.99%. Legal fees shouldnt be more than 1k.
But unsure about KBC's future in Ireland and AIB's Fixed it 3.5% and Var is the same.

Thanks guys, I think I know what I'm going to do.

Best of luck with it, but KBC may be the cheaper option but not always the best. They can be pretty incompetent and you'll need to keep another bank going for basic lodgements, drafts and so on. They are cheap to bank with for a reason.

Sleepy

Was looking into this earlier as, even though we've only been in the property for 9 months, we've done a lot of work to it and in a rising market, I reckon I've probably gained about 10% in equity in that time. We bought the "worst hosue on a good road" for 230k and, having done about 25k worth of work to it I'm seeing lesser houses being listed at 250k or above in the area.

We're with Ulster who, while not quite the best rate on offer in our circumstances on bonkers.ie's recommendations would surely be the easiest option.

The lower rates and cashback incentives from competitors are extremely tempting but unfortunately I think it'd take me a few months to save up the legal costs of switching at the moment. It's rather annoying because the cashback would more than cover the extortionate grand or so a solicitor would no doubt charge to handle the switch.

James Bond Junior

Sleepy wrote: »

Was looking into this earlier as, even though we've only been in the property for 9 months, we've done a lot of work to it and in a rising market, I reckon I've probably gained about 10% in equity in that time. We bought the "worst hosue on a good road" for 230k and, having done about 25k worth of work to it I'm seeing lesser houses being listed at 250k or above in the area.

We're with Ulster who, while not quite the best rate on offer in our circumstances on bonkers.ie's recommendations would surely be the easiest option.

The lower rates and cashback incentives from competitors are extremely tempting but unfortunately I think it'd take me a few months to save up the legal costs of switching at the moment. It's rather annoying because the cashback would more than cover the extortionate grand or so a solicitor would no doubt charge to handle the switch.

Budget €1000 odd to switch. You could ask your solicitor to do the work and you pay when you get the free fee money. Only took a few weeks after drawdown.

PhoenixParker

Sleepy wrote: »

Was looking into this earlier as, even though we've only been in the property for 9 months, we've done a lot of work to it and in a rising market, I reckon I've probably gained about 10% in equity in that time. We bought the "worst hosue on a good road" for 230k and, having done about 25k worth of work to it I'm seeing lesser houses being listed at 250k or above in the area.

We're with Ulster who, while not quite the best rate on offer in our circumstances on bonkers.ie's recommendations would surely be the easiest option.

The lower rates and cashback incentives from competitors are extremely tempting but unfortunately I think it'd take me a few months to save up the legal costs of switching at the moment. It's rather annoying because the cashback would more than cover the extortionate grand or so a solicitor would no doubt charge to handle the switch.

If you think you've dropped a band ask them about revaluing the house. You may not have to switch at all to save €€€

Sleepy

Yeah, was thinking it'd just be a matter of a phonecall and a valuation to go to their 3 year fixed rates for the 60-80% LTV bracket (3.35%) which would be a significant drop from the Standard Variable we're on at the moment (4.30%). According to bonkers.ie it'd save me a fair whack: €108.15 per month or €36,337.98 over term.

Bank of Ireland would save me a bit more (as I have my current account with them) €135.54 per month or €45,542.13 over the term of the mortgage but I'd also get the 2% cashback up front (€4,060) and a further €2,030 in five years time which would total to over 50k saved after paying legal fees...

Sleepy

Anyone know if switching to a fixed term on your mortgage with Ulster Bank ties you to the duration of that term or would I be able to get the better rate with Ulster and switch to BOI a few months / a year later?

irishbuzz

If you break out of a fixed term you will have to pay a penalty. Not sure how much exactly that would be with UB, you'd need to check.

mickoneill31

Careful fixing with UB. If you're on their loyalty rate now (say 3.1% or 3.2%) and fix, once you come off the fixed rate you go onto their SVR. That's 4.3%.
I was going to fix but I rang to check to see if my understanding was correct. It is.
It'd only be worth it for me if I was planning on switching as soon as the fixed rate ended.

Sleepy

I'm already on the SVR which is why I'm so keen to fix / switch!

bigronnie9

mickoneill31 wrote: »

Careful fixing with UB. If you're on their loyalty rate now (say 3.1% or 3.2%) and fix, once you come off the fixed rate you go onto their SVR. That's 4.3%.
I was going to fix but I rang to check to see if my understanding was correct. It is.
It'd only be worth it for me if I was planning on switching as soon as the fixed rate ended.

I thought if you fixed for 3 years that at the end of the fixed term you could choose to fix again if you wanted?

If you wanted to switch to the variable after 3 years and if say you were on the 3 year loyalty plus of 3.2%, could you then switch to the loyalty plus variable of 3.5% or must you go onto the SVR of 4.3% ?

These may be stupid questions/assumptions I have made!!

Ush1

Any merit to this:

https://www.askaboutmoney.com/threads/variable-mortgage-rates-best-buys.197714/

Claims that EBS are the way to go.

bunderoon

bigronnie9 wrote: »

I thought if you fixed for 3 years that at the end of the fixed term you could choose to fix again if you wanted?

If you wanted to switch to the variable after 3 years and if say you were on the 3 year loyalty plus of 3.2%, could you then switch to the loyalty plus variable of 3.5% or must you go onto the SVR of 4.3% ?

These may be stupid questions/assumptions I have made!!

This also crossed my mind. After the three years (which I knew the rate will go up), the plan is to either fix again if the 'deal' is still there, or if not, switch providers.

mickoneill31

bigronnie9 wrote: »

I thought if you fixed for 3 years that at the end of the fixed term you could choose to fix again if you wanted?

If you wanted to switch to the variable after 3 years and if say you were on the 3 year loyalty plus of 3.2%, could you then switch to the loyalty plus variable of 3.5% or must you go onto the SVR of 4.3% ?

These may be stupid questions/assumptions I have made!!

Ah yes you can fix again. I should have mentioned that.

As for the variable. No. If youre in the loyalty rate now and fix. You go onto the SVR if you don't fix again at the end of the term. I thought this sounded wrong and I spelled it out to the person I was speaking to in UB. She was totally sure* I couldnt go back to the loyalty rate. So to save 0.2% now id be going into a rate that is 1.2% more at the end of the three years. So if I fixed now I'd have to be ready to switch or refund at the end of the term or else all of the savings would be eaten up.

* I'm not entirely sure of their competence and I could have been given incorrect info. If you get conflicting info let me know.

bigronnie9

mickoneill31 wrote: »

* I'm not entirely sure of their competence and I could have been given incorrect info. If you get conflicting info let me know.

I just assumed you could, as from their website:

"When your fixed rate mortgage expires you can revert to SVR* or any other mortgage product that you may be offered at this time."

I'll ring them Monday and ask, be interested to see if they give the same info you got!

man_no_plan

Ush1 wrote: »

Any merit to this:

https://www.askaboutmoney.com/threads/variable-mortgage-rates-best-buys.197714/

Claims that EBS are the way to go.

unless you are already a customer in which case you will be on 3.7 variable or 3.5 fixed for one year. No facility to move to LTV.

BOI 3yr fixed rate at 3.1 is attractive along with the 2% cash back. Once you come off the fixed rate you can fix again or switch to another bank and possibly pick up more free money!

With switching, as it is a new loan, can you carry your TRS with you?

radharc

man_no_plan wrote: »

With switching, as it is a new loan, can you carry your TRS with you?

Yes, did it last year with no issues.

man_no_plan

radharc wrote: »

Yes, did it last year with no issues.

Thanks, only got a few months left but every bit helps.

There was all in budget 2017 of some measures to come in 2018 on interest relief, hopefully it will continue in some way.

kodirl

mickoneill31 wrote: »

I switched to Ulster Bank a year ago.

Theyve a €1500 cash back offer. Legal fees cost €950 so I put the remainder off the mortgage.
When I switched it was 3.2%.
Earlier this year they reduced their rate to 3.1%.
Now I've just gone below 60% LTV so I've applied for the 3.0%

When I was with KBC they wouldn't consider dropping my rate to that of newer customers.
So I'm saving over €200pm.

KBC and Ulster Bank have free banking if you keep certain amounts on deposit. I've found though that paying the equivalent off the mortgage saves more than the fees.

E.g for UB if you have €3000 on deposit each month you don't pay €4pm
€3000 costs €7.5pm at 3% so I just keep overpaying my mortgage and pay the €4.

Didn't use a broker at all. Doing the sums isn't hard. I used a broker when I got my first mortgage. Now that I'm more educated in it I know at the time he didn't recommend the best option which cost us €1000s.
On the post above it still seems they can use daft logic. I don't consider KBC sticking it out during the recession to be much of a positive. They didn't pass on cuts when they happened so they were using accounts like mine to buffer their losses.

950euro seems very good for legal fees. Any chance you could pm me the details of the solicitor you used as I'm planning on switching mortgages myself ? Thanks. James