Success! AIB allowed me to switch to a <50% LTV mortgage

YossiB

Registered User
Messages
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Hi All,

Long time lurker of this wonderful site - a credit to the admin and many contributors for such a fantastic service to financial idiots like myself.

plámás out of the way, here's our sitiuation:

Myself and my partner are owner occupiers since February 2014

Mortgage 250k

After 1 year AIB wrote offering Fixed Rates however we never took them up. As a result they put me on the SVR Rate of 4.40%, now due to decrease to 4.15% Dec 1st.

I've since had house Valued by AIB approved Valuers at 525k. Just awaiting the stamped originals in the post now.

With the AIB LTV Variable<=50% @ 3.85% moving down to this almost seems to easy and a no-brainer for us, so much so that I think I'm missing out on something else here, or there are unknown pitfalls I've not taken into account.

Any advice would greatly appreciated!
 
Hi Yossi

Thanks for the plámás - always welcome.

It would be a no-brainer to move to the lower LTV rate. However, it's not clear that you will be allowed to.

I understand that their first response will be to refuse such a move, but they may relent if you tell them you are moving your mortgage to KBC.

Do let us know how you get on.

Brendan
 
Thanks Brendan, AIB have said on the phone that I can move once I submit our request in writing with the original of the valuation.
I'll definitely keep you posted. Thanks again!
 
Great.

The other banks confirmed to the Oireachtas Finance Committee that the original rate is what determines the present rate.

AIB were not asked, as far as I know. One other poster on Askboutmoney has also reported that they were given the lower LTV.

Brendan
 
Quick update: got the valuation sent off to AIB at the beginning of last week (making sure to send it via registered post).. got a letter today confirming that we've been moved down to the LTV<=50% rate of 3.85% starting on 1st Jan.

From initially 4.40% to then 4.15% and now 3.85% , this equates to nearly €100 less in monthly repayments, suffice to say we're pretty happy with the outcome.

Cheers
Rob
 
Yossi - that is great news.

Here is the official response of AIB to Niall Brady of the Sunday Times

[FONT=&quot]“The LTV variable rate applicable is based on the loan to value when the original mortgage was drawn. We do not offer customers the opportunity to subsequently switch LTV bands based on prevailing house valuation or outstanding mortgage balance. The reason for this is that the case is assessed and priced based on the loan to value at original mortgage drawdown. By example, if house values reduced (as they did for extended period in past years), we do not revert to customers to change mortgage to a higher LTV band. For information, we also offer a 3 year fixed rate of 3.8% or 5 year fixed rate of 3.9%.''[/FONT]

So, it appears that you started with a Fixed Rate loan and then went onto SVR.

They allow these customers to switch to an LTV mortgage, but don't allow customers who start off on an LTV.

Seems odd.

Brendan
 
They allow these customers to switch to an LTV mortgage, but don't allow customers who start off on an LTV.

Seems odd.

It's a little frustrating alright. I was hoping to do that as I am currently on the rate for LTV>80%. But the actual LTV is about 70%. But I suppose that's the rules I signed up to.

I only have my mortgage 18 months. Have to say the 2 year fixed of 3.8% is attractive. Not sure if I see a sufficient drop in variable rates in the next two years to justify paying legal fees etc to switch our mortgage.
 
Not sure if I see a sufficient drop in variable rates in the next two years to justify paying legal fees etc to switch our mortgage.

I suggest
1) Apply in writing to switch to the lower LTV. Submit a formal valuation with it.
2) Apply to KBC for Approval in Principle to remortgage
3) After you are declined by AIB, write asking them for a settlement figure as you are switching to KBC

You may well get offered the lower rate.

Brendan
 
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