another mortgage question EBS

evosteo

Hi folks,

I have a question for you mortgage experts,

nearly into the 5th year of my mortgage with ebs (35 year term @ €256k),

Initially I was on a fixed 3 year @ 4.2% (doesn't seem great compared to rates now but was happy at the time we got mortgage approval and i think variable was 4.7%)

After the 3 years we were moved onto the variable 3.7% which we are currently still on,

I seen in the branch today that they are advertising fixed rate mortgages now for 1-5 years @ 3% so i took a flyer.

Im interested in the 5 year fixed @ 3% for the monthly savings and stability.

I played with the idea of maybe switching provider (kbc,aib,ulster bank offering better rates etc...) but the flexibility of paying every month with ebs is especially attractive for me (me and my partner have differing wage frequencies) so they draw the payment on either the 7th,12th,17th or last day of the month and I don't think any other mortgage providers provide that function. It works well for us.

House was recently valued at over €370k

We have approx €236k left to pay over 30 years.

Should I press ahead with the the 5 year fixed @3% or is there lower rates on the horizon would anyone know?

Thanks in advance for any feedback,

evosteo

anyone any pointers?

advertsfox

I would personally shop around for a 60-80% LTV loan as you may get fixed for 5 years from 2.7% to 3%. You'll end up saving a fortune on your monthly payment.

ULB - 5 Year LTV >60-80% = 2.85%
KBC - 5 Year LTV >60-80% = 2.85%
AIB - 5 Year LTV >50-80% = 2.95%
TSB - 5 Year LTV >60-80% = 3.0%
BOI - 5 Year LTV >60-80% = 3.0%

https://aib.ie/our-products/mortgages/mortgage-interest-rates
https://www.kbc.ie/our-products/mortgages/our-mortgage-rates
https://www.permanenttsb.ie/mortgages/mortgage-interest-rates/
https://personalbanking.bankofireland.com/borrow/mortgages/rate-table/
https://digital.ulsterbank.ie/personal/mortgages/mortgage-rates.html

Mousewar

Why are AIB rates so much lower than EBS when they own EBS? Why aren't they passing on the rates to EBS?
I'm stuck with EBS as my wife no longer works so I can't switch as I don't meet Central Bank regulations for a new loan (which is effectively what switching is apparently).
EBS variable is 3.7% while AIB is 3.15%. EBS fixed rate are all 3% while AIB offer 2.85.

evosteo

Mousewar wrote: »

Why are AIB rates so much lower than EBS when they own EBS? Why aren't they passing on the rates to EBS?
I'm stuck with EBS as my wife no longer works so I can't switch as I don't meet Central Bank regulations for a new loan (which is effectively what switching is apparently).
EBS variable is 3.7% while AIB is 3.15%. EBS fixed rate are all 3% while AIB offer 2.85.

Iv always wondered why this is also as AIB are the underwriters for the mortgage???

Bank vs Building society?

hanaimai

Mousewar wrote: »

Why are AIB rates so much lower than EBS when they own EBS? Why aren't they passing on the rates to EBS?
I'm stuck with EBS as my wife no longer works so I can't switch as I don't meet Central Bank regulations for a new loan (which is effectively what switching is apparently).
EBS variable is 3.7% while AIB is 3.15%. EBS fixed rate are all 3% while AIB offer 2.85.

The Central Bank's LTI/LTV rules don't apply to switchers. It might be that you don't meet AIB's own affordability criteria though.

Mousewar

hanaimai wrote: »

The Central Bank's LTI/LTV rules don't apply to switchers. It might be that you don't meet AIB's own affordability criteria though.

Really? I visited PTSB and Ulster Bank in recent years, both of whom told me they were restricted by Central Bank restrictions meaning they couldn't lend me more than 3.5 times my salary as per those restrictions. They just plugged my salary into their new loan thingy and it popped out a no.

hanaimai

Mousewar wrote: »

Really? I visited PTSB and Ulster Bank in recent years, both of whom told me they were restricted by Central Bank restrictions meaning they couldn't lend me more than 3.5 times my salary as per those restrictions. They just plugged my salary into their new loan thingy and it popped out a no.

Definitely don't apply - see here and quote: "The LTV and LTI limits do not apply to switcher mortgages or mortgages entered into in order to address arrears or pre-arrears."

Tails142

I'm in the same boat, with EBS on variable rate. I had planned to switch to KBC, think it's 2.65% fixed for 5 years. Made the application to switch with KBC which involved gathering a lot of paperwork, same as going for a new mortgage basically. Got mortgage approval with them to switch but didn't meet the criteria of the loan conditions at the time as my wife was on maternity leave and they were looking for a letter saying she had returned to employment. Then when she was back to work about 6 weeks later and we were ready to get the letter they were writing out to me saying that if I didn't hurry up they would need to see all new statements for current account and savings accounts (which had gone to crap in the meantime =D).

In the meantime I had read a lot online about people's problems dealing with KBC and their solicitors having problems drawing down funds and there being delays which then needed fresh paperwork etc etc.

Last week I cracked and just filled in a form with EBS to switch from variable to 3.0% fixed for 5 years as I had just lost faith in KBC making it a smooth process and the EBS rate change was straight forward. Luckily I hadn't gone ahead with getting a valuation report so I'm not down anything except time having got all the docs together.

Its hard to know what way rates will go, in the short term it would seem that they may drop lower as governments seem to be dropping their lending rates now again, andIreland is still higher than the EU average lending rates supposedly due to legal/repossession costs.

Historically though these rates are good and if you mess around with Karl's mortgage calculator you will see that as rates drop lower, say below 4% the actual savings on interest start to diminish with lower rates, i.e. the saving of going from 3% to 2% isn't near the saving you get from 4% to 3%. Who knows what effect Brexit might have, also lots of signs of problems in Chinese economy but I've been saying this for 10 years now.


Switching obviously makes sense to get the max saving but only possible if you have your life in order and ducks in a row =D

Trish56

EBS gives cash back up to 3% and AIB or Haven Mortgages which are also owned by AIB don't but offer better rates. - No such thing as a free lunch!

Mousewar wrote: »

Why are AIB rates so much lower than EBS when they own EBS? Why aren't they passing on the rates to EBS?
I'm stuck with EBS as my wife no longer works so I can't switch as I don't meet Central Bank regulations for a new loan (which is effectively what switching is apparently).
EBS variable is 3.7% while AIB is 3.15%. EBS fixed rate are all 3% while AIB offer 2.85.

evosteo

Tails142 wrote: »

I'm in the same boat, with EBS on variable rate. I had planned to switch to KBC, think it's 2.65% fixed for 5 years. Made the application to switch with KBC which involved gathering a lot of paperwork, same as going for a new mortgage basically. Got mortgage approval with them to switch but didn't meet the criteria of the loan conditions at the time as my wife was on maternity leave and they were looking for a letter saying she had returned to employment. Then when she was back to work about 6 weeks later and we were ready to get the letter they were writing out to me saying that if I didn't hurry up they would need to see all new statements for current account and savings accounts (which had gone to crap in the meantime =D).

In the meantime I had read a lot online about people's problems dealing with KBC and their solicitors having problems drawing down funds and there being delays which then needed fresh paperwork etc etc.

Last week I cracked and just filled in a form with EBS to switch from variable to 3.0% fixed for 5 years as I had just lost faith in KBC making it a smooth process and the EBS rate change was straight forward. Luckily I hadn't gone ahead with getting a valuation report so I'm not down anything except time having got all the docs together.

Its hard to know what way rates will go, in the short term it would seem that they may drop lower as governments seem to be dropping their lending rates now again, andIreland is still higher than the EU average lending rates supposedly due to legal/repossession costs.

Historically though these rates are good and if you mess around with Karl's mortgage calculator you will see that as rates drop lower, say below 4% the actual savings on interest start to diminish with lower rates, i.e. the saving of going from 3% to 2% isn't near the saving you get from 4% to 3%. Who knows what effect Brexit might have, also lots of signs of problems in Chinese economy but I've been saying this for 10 years now.


Switching obviously makes sense to get the max saving but only possible if you have your life in order and ducks in a row =D

Thanks for the insight. I was playing around with the application to KBC for the lower rate but your example above is what i feared. My partner works in retail and she sending signals that her job maybe on the ropes. Think the easiest thing is to just switch to the 5 years fixed. I was more worried about signing up for that and they next year they offer 2.7,2.6,2.5% rates.

Its a gamble

evosteo

Dropped into the ebs earlier today and signed the form for 5 years fixed at 3%. The girl behind the counter did say to me that if there was any dramatic changes in interest rates for the better over the next few years there are means to apply for the new rates so not exactly locked into it for 5 years period.

Mousewar

evosteo wrote: »

Dropped into the ebs earlier today and signed the form for 5 years fixed at 3%. The girl behind the counter did say to me that if there was any dramatic changes in interest rates for the better over the next few years there are means to apply for the new rates so not exactly locked into it for 5 years period.

There are means alright. They cost you a whack of money. I wouldn't trust a word of that. I had to take a case against them with the financial ombudsman over lies like that.
Anyway, you're probably grand enough at 3%.

van_beano

evosteo wrote: »

Dropped into the ebs earlier today and signed the form for 5 years fixed at 3%. The girl behind the counter did say to me that if there was any dramatic changes in interest rates for the better over the next few years there are means to apply for the new rates so not exactly locked into it for 5 years period.

You'll need to pay a breakage fee for the privilege of breaking the fixed rate though.

Summer8181

EBS quoted me €3600 breakage fee. I've 18 months left on 3 months fixed mortgage.