Head is a little melted doing the math. Since BoI changed cashback on their variable rate it's messed with our plans a little. Using some bullet points to keep it tidy.
- New one off self-build house
- Cost to build and valuation approx. €500k
- We have approx. €150k savings that will all go to house build (have rainy day savings separately)
- Mortgage will be €350k initially
- We will be coming into approx. €100k around 10 months after initial draw down (will hopefully be around the time the house is completed)
- Plan would be to use the €100k to take a lump sum off the mortgage and get it to €250k
- Have approval from BoI and PTSB (I know from reading here they're not the most popular but efforts to go with Avant were ignored by the broker which didn't fill us with confidence)
- PTSB full variable rate of 4.5% comes with cashback of €7k (based on €350k initial mortgage). If we go PTSB variable rate, can we switch mortgage provider at any stage? Say we've drawn down the full €350k and we pay two months (40 days to get the cashback) of the mortgage payment for this full amount, can we then switch provider? I assume there's no switching possible during the build process where we'll be drawing down in stages. I've seen some posts mention banks don't like to accept a switcher if they haven't been paying their full mortgage for at least 12 months (which we wouldn't have done).
- BoI are offering a split mortgage option of 4 years at 3.6% on €250k, and €100k on 4.15% variable. On face value, this suits perfectly as once we get the additional €100k we can pay off the variable rate portion of the mortgage leaving only the €250k on the fixed rate. However, I'm a bit reticent fixing for 4 years given the sense the ECB will start cutting rates this year. That said, form reading here and elsewhere, there's no guarantee Irish banks will pass on any reductions so a 3.6% fixed might be as good as it gets for the next couple of years?
- If there is the option to switch from PTSB once the mortgage is drawn down fully, I'm considering going with them to get the cashback and then switching. If it's possible, (if I was doing this now) I'd go to a BoI variable rate for one month, then move to a fixed rate in the region of their current existing customer rate of 3.8% over 2 years. This would have the (potential) benefit of getting the PTSB cashback, giving it one year for fixed rates to (hopefully) drop, and then switching to more appealing fixed rate at that point.