Mortgage move provider / overpayment opinions

Baby01032012

Hi all,

Apologies if this is repeating other threads.

I have €105,000 left on my mortgage (<50%) based on current value. Rate 3.65% variable with BOI, maturity December 2032 (15.5 years). I was looking at rate of 3% with KBC with a saving of approx. €35 pm. I was also looking to overpay by approx. €500 pm to reduce term by 7.25 years/ saving €16k interest.

Any thoughts on benefit/cost of moving mortgage and any thoughts on overpayment.

many thanks.

brendan86

The term below is over 16 years not 15.5

Below is graph if you overpay for 500 per month

KBC 3% 105,000 (Overpayment)
Repayment: 689+500=1189
Term: 8yrs 4mths
Term reduction: 7yrs 8mths
Total interest paid: 13,785
Total repayable: 118,785

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BOI 3.65% (Overpayment)
Repayment: 722+500=1,222
Term: 8yrs 4months
Term reduction: 7yrs 8months
Total interest: 16,877
Total repayable: 121,877

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Below is a graph if you don't make any overpayments

KBC 3% 105,000
Repayment: 689
Term: 16yrs
Total interest: 27,337
Total repayable: 132,337

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BOI 3.65%
Repayment: 722
Term: 16yrs
Total interest: 33,782
Total repayable: 138,782

So if you switch and make overpayments every month you will save 3,088 off term of your mortgage

If you switch and don't make any overpayments you save 6,445 over the term of mortgage

(Providing KBC will always be better than BOI by .65%)

Baby01032012

Thanks that sounds right. However I think you mean if I switch and overpay I'll save 20k against just switching which will save 3k

Is a 3k saving worth switching for given legal costs and valuation?

brendan86

Baby01032012 wrote: »

Thanks that sounds right. However I think you mean if I switch and overpay I'll save 20k against just switching which will save 3k

Is a 3k saving worth switching for given legal costs and valuation?

No you can't look at it that way that your saving 20k by switching and making a extra payment of 500per month

You have to look at it if you stay with BOI and pay the extra 500 per month also to even the situation and your true saving is 3,088

The most you can possibly save by switching is 6,445 over 16 years with no extra payments made.

brendan86

When switching KBC will cover legal costs and valuation at least they have a switcher deal

But is it worth switching I dunno, if your gonna make your overpayments when you switch you could just make the overpayment with BOI the saving is only 3,088 over the near 8 yes it isn't a big difference .

You need to just decide who you think will be the better bank and who will pass on interest rate reductions (unlikely) or who will up there variable rate in bigger jumps

My 2 cents is ring BOI say your LTV is <50% and you are considering switching to KBC as they will give you rate of 3%

They might offer you a better rate , they may not but that would be first port of call.

Trish56

KBC will give you 3k cash back if you switch to them up to 30th September but more than likely will retain until end of year. this will more than cover your legal and valuation fees. Legal Fees to switch should be circa 1k and valuation fee €150.

I would ask KBC if you moved to them and decided in 2 years time to fix would they offer you the same rates they offer new customers.