Change property value on an existing mortgage

pasquale83

An estate agent told me that my house is worth a way more now than at the time it was mortgaged.

I'm just wondering if I can get a valuation done and update the property value on the mortgage to get a different (lower) variable rate as the LTV will go down?

listermint

pasquale83 wrote: »

An estate agent told me that my house is worth a way more now than at the time it was mortgaged.

I'm just wondering if I can get a valuation done and update the property value on the mortgage to get a different (lower) variable rate as the LTV will go down?

There are lots of thread on this in the last month here. Just have a gander over a page or 2 here. You will get your answer

pasquale83

listermint wrote: »

There are lots of thread on this in the last month here. Just have a gander over a page or 2 here. You will get your answer

sorry, didn't find what you mentioned. can you link me a thread please?

van_beano

You're looking at a LTV Variable mortgage. They are generally categorised as >50%, 50% to 80% and <50% LTV. Some banks do different categories. The more equity you own in the property the lower the interest rate you'll get.

I got a valuation done a couple of months ago, cost €150. It knocked €80 per month off the mortgage. Had to break my fixed rate with the bank, cost €360ish. It's not cheap initially to do it and provided the rates stay the same or go down it'll take me around 6 months to "make" the cost back.

At least I have a proper valuation now for when I need to revalue the property for the property tax next year

pasquale83

van_beano wrote: »

You're looking at a LTV Variable mortgage. They are generally categorised as >50%, 50% to 80% and <50% LTV. Some banks do different categories. The more equity you own in the property the lower the interest rate you'll get.

I got a valuation done a couple of months ago, cost €150. It knocked €80 per month off the mortgage. Had to break my fixed rate with the bank, cost €360ish. It's not cheap initially to do it and provided the rates stay the same or go down it'll take me around 6 months to "make" the cost back.

At least I have a proper valuation now for when I need to revalue the property for the property tax next year

thanks for sharing your experience. so the answer is yes, it is possible

so I guess the process was to have the house valued again and then ring the mortgage provider to update the LTV? has it been easy to convince the bank to update the LTV getting a lower rate?

Thanks again!

van_beano

pasquale83 wrote: »

thanks for sharing your experience. so the answer is yes, it is possible

so I guess the process was to have the house valued again and then ring the mortgage provider to update the LTV? has it been easy to convince the bank to update the LTV getting a lower rate?

Thanks again!

Yes it is possible to get a better interest rate if your property is worth significantly more than the mortgage owed.

If you are on a fixed rate mortgage at the moment then ring the bank and check breakage fee cost. If you're currently on a variable then you don't have to worry about breakage costs.

After you get all the sorted you use a valuer that is recognised by your bank, they have a panel of valuers they use - check with bank. You won't need to convince the bank of anything, the valuer values your house for what it is worth and the bank will accept it and place it into what ever LTV category that's applicable. Additionally, I don't know if what, if anything, happens with mortgages in arrears etc.

pasquale83

van_beano wrote: »

Yes it is possible to get a better interest rate if your property is worth significantly more than the mortgage owed.

If you are on a fixed rate mortgage at the moment then ring the bank and check breakage fee cost. If you're currently on a variable then you don't have to worry about breakage costs.

After you get all the sorted you use a valuer that is recognised by your bank, they have a panel of valuers they use - check with bank. You won't need to convince the bank of anything, the valuer values your house for what it is worth and the bank will accept it and place it into what ever LTV category that's applicable. Additionally, I don't know if what, if anything, happens with mortgages in arrears etc.

OK, I am not clear enough I try to explain better.

I already have a variable rate mortgage and my LTV is around 53%. My property value has increased as per estate agent/valuer and if I input this value in the LTV calculation (my outstanding mortgage balance/property value) I go well below 50%, an LTV band where the interest rate is lower than the actual one.

My question is: is it possible go to the bank with an updated house value and ask them to give me the lower interest rate?

van_beano

pasquale83 wrote: »

OK, I am not clear enough I try to explain better.

I already have a variable rate mortgage and my LTV is around 53%. My property value has increased as per estate agent/valuer and if I input this value in the LTV calculation (my outstanding mortgage balance/property value) I go well below 50%, an LTV band where the interest rate is lower than the actual one.

My question is: is it possible go to the bank with an updated house value and ask them to give me the lower interest rate?

No you're clear enough.

Contact the bank, tell them you want a rate of <50% LTV. They'll send you paperwork to sign. You attach a certified valuation report (from a recognised valuer that's on your banks approved list) to the banks paperwork and send it back to them. If everything's in order then the new rate gets applied within a week or 2. Your monthly payments reduce but you can over pay if you want to reduce the years left in the mortgage.

caff

It depends on your mortgage provider also. I was with ptsb and they wouldn't let me move to a different ltv band. Had to switch to kbc.

pasquale83

van_beano wrote: »

No you're clear enough.

Contact the bank, tell them you want a rate of <50% LTV. They'll send you paperwork to sign. You attach a certified valuation report (from a recognised valuer that's on your banks approved list) to the banks paperwork and send it back to them. If everything's in order then the new rate gets applied within a week or 2. Your monthly payments reduce but you can over pay if you want to reduce the years left in the mortgage.

caff wrote: »

It depends on your mortgage provider also. I was with ptsb and they wouldn't let me move to a different ltv band. Had to switch to kbc.

thank to both of you. I am with AIB, I will try to ring them and see what they say.

Nika Bolokov

Has anyone had any luck doing this with PTSB ??

runawaybishop

Nika Bolokov wrote: »

Has anyone had any luck doing this with PTSB ??

Did it with ptsb a few weeks back. They also paid for the valuation.

Nika Bolokov

runawaybishop wrote: »

Did it with ptsb a few weeks back. They also paid for the valuation.

Jeez I rang and they said no way

tommythecat

pasquale83 wrote: »

thank to both of you. I am with AIB, I will try to ring them and see what they say.

I just did this recently with AIB. You need to use a valuer on their "approved" list. You can only change the LTV once in the lifetime of the loan but it sounds like you would be moving to the lowest rate <50 so that shouldn't be a problem for you.

Shedite27

runawaybishop wrote: »

Did it with ptsb a few weeks back. They also paid for the valuation.

Any idea why they did this? Am I reading that right, they paid for you to pay them less?

runawaybishop

Shedite27 wrote: »

Any idea why they did this? Am I reading that right, they paid for you to pay them less?

Yeah, i am not sure why. We are on a variable mortage, dunno if that makes a difference. We were given a list of valuers that were approved and a voucher for a valuation. Guy called out, sent off the valuation and we got a reduced rate based on the improved LTV.

pasquale83

I rang AIB today and they told me that it is not possible to jump to a lower LTV band either reducing the principal than increasing the house value

Malari

pasquale83 wrote: »

I rang AIB today and they told me that it is not possible to jump to a lower LTV band either reducing the principal than increasing the house value

But you could switch. I was told the PTSB are the only ones switching existing mortgage holders to lower LTV bands.

dar100

van_beano wrote: »

You're looking at a LTV Variable mortgage. They are generally categorised as >50%, 50% to 80% and <50% LTV. Some banks do different categories. The more equity you own in the property the lower the interest rate you'll get.

I got a valuation done a couple of months ago, cost €150. It knocked €80 per month off the mortgage. Had to break my fixed rate with the bank, cost €360ish. It's not cheap initially to do it and provided the rates stay the same or go down it'll take me around 6 months to "make" the cost back.

At least I have a proper valuation now for when I need to revalue the property for the property tax next year

Van Beano can I ask the details of breaking your fixed rate mortgage? The bank you are with? Time left on fixed rate and how much this cost you?

Thanks

tina1040

They might change it if you were going to switch to another bank but there's a cost there too as you need a solicitor so not as simple as it sounds. I would check it out further by making an appointment with the bank manager to discuss your finance.

van_beano

dar100 wrote: »

Van Beano can I ask the details of breaking your fixed rate mortgage? The bank you are with? Time left on fixed rate and how much this cost you?

Thanks

I'm 8 years into a 35 year mortgage with AIB. Had started a 5 year fixed @ 3.9% in mid 2015 after coming out of a previous fixed period.

I had a lot of work done to the house in 2015 - 64m2 increase, this increased the house value. So I was about 18 months into the 5 year fixed in Feb just gone and I got a notion to just ring AIB for the craic to see how much it would cost to break it to jump to a lower LTV mortgage, I thought it'd be thousands. They said they'd post out the letter to me.

The letter arrived a few days later saying it'll be €364 to break the fixed rate, I had to sign form within 5 days and forward on a valuation report. Got all that sorted, the house valued at about 58% of the amount owed. Went down to 3.3% rate on the next payment. It's by no means the best rate out there but switching would be required.

The above all happened without any hassle or objection.

micar

I'm on 4.5% with BOI

Based on current value, LTV is now under 50%.

BOI won't budge and I'm the process of switching to EBS at a rate of 3.3%.

I'm sick of BOI and their non variable rate movement.

pasquale83

Malari wrote: »

But you could switch. I was told the PTSB are the only ones switching existing mortgage holders to lower LTV bands.

Yeah, I should switch back to KBC. I moved to AIB around 1 year ago and the switching process is long and stressful, so not sure will do it again even if I can get 2k from the switching (to cover legal expenses but I'm 100pc sure there will be money left for me as well)

Malari

pasquale83 wrote: »

Yeah, I should switch back to KBC. I moved to AIB around 1 year ago and the switching process is long and stressful, so not sure will do it again even if I can get 2k from the switching (to cover legal expenses but I'm 100pc sure there will be money left for me as well)

I'm considering moving in this direction too, switching for the first time. I think I'd get a much better LTV band so it should worth it at least once.