Fixed or variable?

B

BigNelly

Registered User
Messages
6
Hi

I have mortgage since 2002, I did take a top up to renovate the house. I am with BOI and paying 3.65% on part and 3.97% on the top up. I rang them and BOI can't do any better. Mortgage is running till 2032

I am currently at LTV at 37% and I have started to pay more per month than I owe

I think from reading this forum I should move and have rang KBC already but I am just wondering should I go fixed or should I go on variable?

KBC offered 3.5% if I move and open current account with them

Hope it is ok to ask this type of question here :)
 
What percentage of your outstanding loan is on 3.56% and what is on 3.97%?
I'm just wondering what your effective average rate is?
Will it be worth switching to KBC for 3.5%?
What about switching costs?
Bear in mind that KBC have a reputation for enticing new customers with attractive rates but then treating existing customers unfairly compared to new customers (see other threads here).
 
66% is on the 3.65% and rest is on the 3.97%
They are saying they will reduce my monthly repayment by about €25 so if I take out new mortgage on same term(finishing in 2032) and keep overpaying by the amount I currently do I will reduce the term by 5 years and 15k interest

KBC are offering 2 k to move, I am checking now with solicitors on cost and I will need to get valuation but a house on same street in worse condition is how I am currently working out LTV. I know according to a friend who sells house the house is worth more than I am putting down

Edit
Got initial cost of €1100 for Solicitor, saying it might be more depending on what bank I am with....guess they will up there cost if they know I am getting 2k to move
 
It's great to see some element of competition, however limited, re-emerging in the mortgage market.

It shouldn't cost you anything to switch and interest savings certainly become material over time.

The KBC variable rate looks like good option if you are planning to repay the mortgage ahead of schedule as KBC allow borrowers to re-draw amounts previously repaid in excess of the original repayment schedule.

Don't forget that KBC also offer a 50% reduction in home insurance premiums for 12 months - that should also be worth a few bob.
 
So your average rate is 3.76% which means that 3.5% should save you c. €26 p.a. per thousand or €2.17 p.m. per thousand (so I'm guessing that your loan balance must be c.
At the very least tell BoI you're considering moving to save money and see what they say.
Why won't BoI let you fix at 3.6%?
If you are overpaying then it makes more sense to overpay the portion at 3.97% before the portion at 3.65%.
 
ClubMan said:
So your average rate is 3.76% which means that 3.5% should save you c. €26 p.a. per thousand or €2.17 p.m. per thousand (so I'm guessing that your loan balance must be c.
At the very least tell BoI you're considering moving to save money and see what they say.
Why won't BoI let you fix at 3.6%?
If you are overpaying then it makes more sense to overpay the portion at 3.97% before the portion at 3.65%.
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Thanks, I rang BOI and just wanted to confirm interest rates, time left etc. Told the girl KBC had rang me and wanted me to move over to them. Gave all the details so she knew I was serious.

I was moved from IBRC to BOI and I was told the interest rate I am on is better than she could offer, if I was on a BOI interest rate I would be over 4%. More or less she said I could stick with what I have and if I wanted any better then off I go somewhere else
 
Sarenco said:
Don't forget that KBC also offer a 50% reduction in home insurance premiums for 12 months - that should also be worth a few bob.
Click to expand...

I actually already have home insurance with them, I have a credit card and savings and they offered me great deal to take out the home insurance as well....trying to see now if I do take out mortgage if they will give me cheap home insurance next year
 
BigNelly said:
I was moved from IBRC to BOI and I was told the interest rate I am on is better than she could offer, if I was on a BOI interest rate I would be over 4%.
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That makes no sense to me.
You're on lower than that at the moment.
And BoI offer 3.6% fixed for 2-3 years to existing borrowers with an LTV < 80% which is you.
Unless they don't treat former IBRC customers the same as other existing customers...
 
BigNelly said:
I actually already have home insurance with them, I have a credit card and savings and they offered me great deal to take out the home insurance as well....trying to see now if I do take out mortgage if they will give me cheap home insurance next year
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Even with a discount some home insurance can be much more expensive than what's available elsewhere.
Make sure to shop around, make sure to insure for the rebuilding cost not the market value, make sure to avoid any unnecessary bells and whistles etc.
 
BigNelly said:
I actually already have home insurance with them, I have a credit card and savings and they offered me great deal to take out the home insurance as well....trying to see now if I do take out mortgage if they will give me cheap home insurance next year
Click to expand...

Fair play to you.

If more people showed that level of initiative, I've no doubt that financial products would be far more competitively priced. Customer inertia has always been a banker's best friend.
 
ClubMan said:
That makes no sense to me.
You're on lower than that at the moment.
And BoI offer 3.6% fixed for 2-3 years to existing borrowers with an LTV < 80% which is you.
Unless they don't treat former IBRC customers the same as other existing customers...
Click to expand...

Hi ClubMan

I'm not sure I understand why a borrower that hopes to make accelerated capital repayments would ever chose a fixed rate mortgage @3.6%, rather than a variable rate @3.5%, without some other compelling incentive (or an uncanny ability to predict future interest rate movements!).

Absolutely agree with your point that it shouldn't be assumed that KBC's home insurance will necessarily be the best offer available, even with the 50% discount. Having said that, in my own case I found that KBC's discounted home insurance resulted in a saving of around €200, as against the best alternative quote that I could find.
 
ClubMan said:
Even with a discount some home insurance can be much more expensive than what's available elsewhere.
Make sure to shop around, make sure to insure for the rebuilding cost not the market value, make sure to avoid any unnecessary bells and whistles etc.
Click to expand...

I shop around for everything, when I got onto KBC they where about 10 euro more expensive than the other quotes I had(I had rang all the other providers). After I told them I was a customer etc.....girl put me on hold, came and offered me nearly 100 under everyone else. Now I can't argue with that.
 
BigNelly said:
I shop around for everything, when I got onto KBC they where about 10 euro more expensive than the other quotes I had(I had rang all the other providers). After I told them I was a customer etc.....girl put me on hold, came and offered me nearly 100 under everyone else. Now I can't argue with that.
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I love hearing stories like that.

You do realise that you are in danger of being held up as a role model!:D
 
Sarenco said:
I love hearing stories like that.

You do realise that you are in danger of being held up as a role model!:D
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haha, I do shop around for everything, insurance/TV/BB/phone etc. If the company is not willing to do a bit of negotiating then I just join a rival.

Always take hour or so doing some research on internet, have competition prices wrote down and ready to use when I ring companies.

Always worth ringing them as well and quote online deal and see if they will do anything better on phone as usually person on phone is on commission. Nobody gets paid most of the time if you register online :) it goes straight into company pockets

The mortgage is the only thing I have never really negotiated for, not really sure why as it is the biggest bill I have.....not too late to start now anyway

Never pay full price unless you really have to.....
 
Sarenco said:
I'm not sure I understand why a borrower that hopes to make accelerated capital repayments would ever chose a fixed rate mortgage @3.6%, rather than a variable rate @3.5%, without some other compelling incentive (or an uncanny ability to predict future interest rate movements!).
Click to expand...
Fair point - I overlooked the issue of making accelerated capital repayments.
 
BigNelly said:
haha, I do shop around for everything, insurance/TV/BB/phone etc. If the company is not willing to do a bit of negotiating then I just join a rival.

Always take hour or so doing some research on internet, have competition prices wrote down and ready to use when I ring companies.

Always worth ringing them as well and quote online deal and see if they will do anything better on phone as usually person on phone is on commission. Nobody gets paid most of the time if you register online :) it goes straight into company pockets

The mortgage is the only thing I have never really negotiated for, not really sure why as it is the biggest bill I have.....not too late to start now anyway

Never pay full price unless you really have to.....
Click to expand...
Well done - if only more people would do this so that customers in general played their full part in the free market.
 
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