Bank of Ireland trims fixed rates

More of the same from BoI - get the mugs onto slightly lower fixed rates pronto.
And more of the same "slash[ing]" hyperbole from the Indo.
3.6% fixed for 2 years for LTV < 80%.

Bank of Ireland slash mortgage rates for homeowners opting for fixed rate

It really is disgraceful.

Existing customers have a choice of continuing to pay 4.5% SVR or getting locked in for at least two years at 3.75%.

They know that a lot of people like to fix for one year, so they make that option available to new customers only.

Brendan

I would imagine a borrower with a low LTV would prefer to pay 3.6% on a two-year fixed rate deal than stay at the 4.5% SVR, which seems very unlikely to fall any time soon.

If the borrower really wants to stay on a variable rate, they can always switch to KBC at 3.55%.

I actually think it's really encouraging to see some degree of competition re-entering the mortgage market.

If I avail of this offer to take my variable 4.35% to 3.6% , can I ask to keep my monthly payments the same amount as at present. After the fixed period is over, if my rate then jumps back to 4.35%, will my repayments also jump?
In other words, can i agree to overpay by .75% for the fixed duration? Hope I made my question clear, thanks.

If you keep the repayments the same then you will be paying more than the scheduled amount.
The additional amount can be used to reduce the capital balance quicker than it would otherwise come down.
But you need to make sure that BoI understand this and deduct the additional amount off the capital balance.
I would get it in writing from them just to be safe.
One effect of this accelerated capital repayment is that it can reduce the ultimate/effective term of the mortgage.
One way or another it will save you money in the long term so if you can afford it, don't have other higher cost debts that it would be better paying down and don't need the money for anything else (including pension savings) then I would say go for it. [Edit: Just to clarify ... I meant overpaying the mortgage in general - not fixing at the reduced BoI fixed rate!]
If you keep your repayments at the 4.35% level even when your rate goes down to 3.6% and then the rate goes back to 4.35% later then your repayments will stay the same.
However bear in mind what Brendan says about it maybe being a bad idea to go for the fixed rate now.

Those reductions are a joke, what arrogance from boucher and co again. I like a lot of people are not in a position to switch so all this talk of switching is irrelevant. Fine if u can and hopefully lots of people will move away from BOI despite this. 1% reduction in svr now please otherwise campaign needs to step up and im not just talking about lobbying tds and senators. Silent majority and currently active people needed to picket CB, Dept of finance and the Dail, current numbers of active svr holders not enough though for this tactic for me. Bankers and politicians not getting the message with the current tactics only for me and they know enough people are not getting involved. I will blame the silent majority if we don't get what we want on top of the arrogant bankers, government and cb.

The fact that BOI have not extended the 1 year rate to existing customers is cynical, but is it not better for BOI customers to switch to a lower fixed rate anyway, e.g 2 year version @ 3.75%? Even those in negative equity could at least reduce cost v BOI SVR. Others with positive equity may consider switching to competitors who at least treat new and existing customers the same. BOI will hardly reduce SVR by 1% anyway so what is there to lose by availing of a lower fixed rate? As for political/ CBI pressure, I am not convinced this will work, but customers moving to other banks wherever possible may be effective in focussing BOI minds.

Concerning said:

Others with positive equity may consider switching to competitors who at least treat new and existing customers the same. BOI will hardly reduce SVR by 1% anyway so what is there to lose by availing of a lower fixed rate?

Click to expand...

Well if you're on a fixed rate you can't switch to another lender without paying an exit fee.

shweeney said:

Well if you're on a fixed rate you can't switch to another lender without paying an exit fee.

Click to expand...

True but you're not going to be switching any time soon if you're in negative equity or have a materially reduced income with no realistic prospect of this changing in the medium term.

The attitude of Bank of Ireland to their existing variable rate customers begs the question, who in their right mind would voluntarily be their customer? (other than the poor mugs like myself who are stuck with them & can't switch).
At the meeting in Ballsbridge it was suggested to move your ancillary banking products to other providers. I have moved my current account from BofI and am in the process of changing Life Assurance provider which they sold me at the time I took out my mortgage & I haven't given a second thought to since.
I am also asking my family and friends to boycott Bank of Ireland products until they start reducing their variable mortgage rate for existing customers.
I would suggest to anyone looking at taking out a new mortgage to see how the bank that is touting for business actually treats their existing customers.

Concerning said:

is it not better for BOI customers to switch to a lower fixed rate anyway, e.g 2 year version @ 3.75%? Even those in negative equity could at least reduce cost v BOI SVR. BOI will hardly reduce SVR by 1% anyway so what is there to lose by availing of a lower fixed rate?

Click to expand...

This is an interesting question.
You are being fleeced by BoI at 4.5% and because of negative equity, you can't switch to a new lender.
You are still being fleeced at 3.75% because that is probably around 1% more than they should be charging someone who fixed for two years.
So what is there to lose?

I think that BoI will be forced to reduce their variable and their fixed rates. If you fix today at 3.75%, and next month they introduce a fixed rate of 3% for 5 years, you will not be able to avail of it.

The Fair Mortgage Rates Campaign has encouraged the lenders to trim their mortgage rates. But there is a lot more to go.

No one knows the right answer. ECB rates may increase in which case you will regret not fixing for two years at 3.75%. But, on balance, and it's only on balance, I think a cut is far more likely than a rise.

Brendan