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Mortgage - LTV

  • 01-04-2019 11:14am
    #1
    peadar76
    Registered Users, Registered Users 2 Posts: 246 ✭✭


    I am currently on a SVR of 3.15% with Haven.

    I have the opportunity to switch to a 2.95% LTV rate.

    Is there any disadvantage to doing this? Is the LTV rate just a lower SVR?
    And if the SVRs drop in the future will the LTV drop also?


Comments

  • #2
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    No disadvantage to you. Lenders are now obliged to offer a loan to value rate so will be a saving for anyone gone below 80% loan to value. The only cost to you is the price of the valuation €150.


    peadar76 wrote: »
    I am currently on a SVR of 3.15% with Haven.

    I have the opportunity to switch to a 2.95% LTV rate.

    Is there any disadvantage to doing this? Is the LTV rate just a lower SVR?
    And if the SVRs drop in the future will the LTV drop also?


  • #3
    Lu Tze
    Registered Users, Registered Users 2 Posts: 3,495 ✭✭✭Lu Tze


    Trish56 wrote: »
    No disadvantage to you. Lenders are now obliged to offer a loan to value rate so will be a saving for anyone gone below 80% loan to value. The only cost to you is the price of the valuation €150.

    Where did you hear this that lenders are obliged to offer you the lower loan to value rate? I think we have dropped beyond the 50% threshold now, so would be interested if the the bank is obliged to offer us the lower rate following a valuation


  • #4
    Wheety
    Registered Users, Registered Users 2 Posts: 5,512 ✭✭✭Wheety


    Lu Tze wrote: »
    Where did you hear this that lenders are obliged to offer you the lower loan to value rate? I think we have dropped beyond the 50% threshold now, so would be interested if the the bank is obliged to offer us the lower rate following a valuation

    What bank are you with?

    'obliged to offer' doesn't mean they have to come to you and offer it. You do your own research and apply for the lower rate. I have switched rate twice with KBC and I'm paying around €110 less a month than I was at the start.


  • #5
    peadar76
    Registered Users, Registered Users 2 Posts: 246 ✭✭peadar76


    I'm with Haven.
    Recently got a statement, at the bottom of which it said that 2.95% was available for 50-80 LTV and 2.75% for 50


  • #6
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    This was introduced by the Central Bank from January 2019. When you receive your annual statement there should be a notice attached offering you loan to value rates.
    Lu Tze wrote: »
    Where did you hear this that lenders are obliged to offer you the lower loan to value rate? I think we have dropped beyond the 50% threshold now, so would be interested if the the bank is obliged to offer us the lower rate following a valuation


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  • #7
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    Yes they do have to offer you a lower loan to value as and from January 2019.

    Wheety wrote: »
    What bank are you with?

    'obliged to offer' doesn't mean they have to come to you and offer it. You do your own research and apply for the lower rate. I have switched rate twice with KBC and I'm paying around €110 less a month than I was at the start.


  • #8
    Wheety
    Registered Users, Registered Users 2 Posts: 5,512 ✭✭✭Wheety


    Trish56 wrote: »
    Yes they do have to offer you a lower loan to value as and from January 2019.

    Fair enough, I hadn't heard of that. I'm already on a LTV rate.


  • #9
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    Great and if your LTV reduces further they have to offer you the lower rate. Details will be issued with your Annual Statement.
    Wheety wrote: »
    Fair enough, I hadn't heard of that. I'm already on a LTV rate.


  • #10
    august12
    Registered Users, Registered Users 2 Posts: 1,275 ✭✭✭august12


    Trish56 wrote:
    Great and if your LTV reduces further they have to offer you the lower rate. Details will be issued with your Annual Statement.

    If one accepts the lower rate, does this affect any overpayment per month one may have signed up to, in other words, do I have to sign up again for the monthly overpayments arrangement.


  • #11
    hanaimai
    Registered Users Posts: 207 ✭✭hanaimai


    Trish56 wrote: »
    Yes they do have to offer you a lower loan to value as and from January 2019.

    The lenders have to tell you about lower LTV rates annually but they don't automatically transfer you to the lower rate. You still have to ring up and say you want to be moved to that rate. Just to clarify!


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  • #12
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    Of course and a phone call won't suffice either. I did mention in an earlier post that you have to pay for a valuation and you will also sign a form requesting the lower rate.

    hanaimai wrote: »
    The lenders have to tell you about lower LTV rates annually but they don't automatically transfer you to the lower rate. You still have to ring up and say you want to be moved to that rate. Just to clarify!


  • #13
    MightyMunster
    Registered Users, Registered Users 2 Posts: 1,286 ✭✭✭MightyMunster


    Trish56 wrote: »
    Great and if your LTV reduces further they have to offer you the lower rate. Details will be issued with your Annual Statement.



    AIB told me we could only switch once. So if we took the <80% we would never be able to get the <50% LTV rate


  • #14
    Wheety
    Registered Users, Registered Users 2 Posts: 5,512 ✭✭✭Wheety


    MightyMunster wrote: »
    AIB told me we could only switch once. So if we took the <80% we would never be able to get the <50% LTV rate

    That's someone who doesn't know what they're talking about. You could always switch banks too.


  • #15
    Lu Tze
    Registered Users, Registered Users 2 Posts: 3,495 ✭✭✭Lu Tze


    Thanks guys, i didnt realise they now had to switch you on request - i was building up to go in threatening to move banks etc!


  • #16
    hanaimai
    Registered Users Posts: 207 ✭✭hanaimai


    Lu Tze wrote: »
    Thanks guys, i didnt realise they now had to switch you on request - i was building up to go in threatening to move banks etc!

    Technically they don't HAVE to switch you to a lower rate. Lending (including switching) will always remain a commercial decision for the banks. The Central Bank requirement is that they must tell you about lower rates that may be available to you - pending valuation and any other criteria the bank itself sets (e.g. generally if you're in arrears you can't switch).

    If you're with a particular bank, have had no problem meeting repayments and that bank offers a lower rate (based on LTV or otherwise), then there shouldn't really be any reason why they wouldn't accept your request of course.


  • #17
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    From January this year if you qualify for a lower rate under Central Bank Regulations the lender must switch you to the lower rate depending on your loan to value. So when you reach 50% LTV they must offer you the lower rate.

    MightyMunster wrote: »
    AIB told me we could only switch once. So if we took the <80% we would never be able to get the <50% LTV rate


  • #18
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    I think there may be a bit of confusion here the OP asked about moving to a lower loan to value rate with his existing lender. Switching mortgage is totally different as you have to qualify for the mortgage with a new lender.

    Under changes introduced in Jan 2019 to the Consumer Protection Code the lender must notify customers on variable rate mortgages every year as to whether they can or cannot move to a cheaper rate as a result of a move in their loan to value interest rate band subject to providing an up to date valuation.

    As far as I'm aware if you are in arrears but inside the loan to value interest band you can request to be moved to the new lower rate which is a big plus to the many people who fell into arrears in the recession and were charged higher variable rates up to 4.50% and could not switch, they at least now can apply for a lower loan to value rate with their existing lender subject to valuation. You could be 3k in arrears and your loan to value is less than 50% and you are currently paying the banks standard variable rate then you can request to be moved to the lower rate band.
    hanaimai wrote: »
    Technically they don't HAVE to switch you to a lower rate. Lending (including switching) will always remain a commercial decision for the banks. The Central Bank requirement is that they must tell you about lower rates that may be available to you - pending valuation and any other criteria the bank itself sets (e.g. generally if you're in arrears you can't switch).

    If you're with a particular bank, have had no problem meeting repayments and that bank offers a lower rate (based on LTV or otherwise), then there shouldn't really be any reason why they wouldn't accept your request of course.


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