Advice on switching our mortgage

L

lmacbeth

Registered User
Messages
12
Hi,

We are currently considering switching our mortgage from IIB to Ulster Bank as recommended by our mortgage broker.
We have 27 years left on a 30 year mortgage which is now at about €188,000. We were on a fixed rate for the first 3 years and last month the fixed term ended.

We are currently paying €1,075 monthly on the variable rate. Don't know what the actual rate is as they haven't informed us. Just gave us further fixed rate options and that was it.

One of the options we are looking at is to change to a 3 yr fixed rate with Ulster Bank for about €1060 monthly but taking 2 years of the mortgage reducing it to 25 years. Ulster bank also pay the costs of switching.
We are not sure of the value of our house as it was a self-build but we think it should be at least €350,000/€400,000.

Our worries/questions are -

1. Should we be fixing at all !?
2. Given that we are borrowing a small-ish amount compared to most these days and the potential value of the property, would the LTV tracker rates be of more benefit to us ?
3. Are there other lenders apart from Ulster Bank that pay the costs of switching?

We've been trying to check out all the rates etc but totally confused with different rates/options shown etc. and don't want to rely entirely on the mortgage broker.

I'm sure it's not that difficult but would appreciate some advice from people who seem to have a much better head for this stuff than us!!!
 
lmacbeth said:
We are currently paying €1,075 monthly on the variable rate. Don't know what the actual rate is as they haven't informed us.
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Huh!? Did you never get any letter clarifying the rate and any subsequent changes? Did you never get annual statements that contained this info? You should write to them asking them what the current rate is?
1. Should we be fixing at all !?
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Have you read the many other threads on the whole fixed versus variable/tracker rate question? I suspect that you should not since you don't seem to be under pressure with your mortgage repayments.
2. Given that we are borrowing a small-ish amount compared to most these days and the potential value of the property, would the LTV tracker rates be of more benefit to us ?
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I would be inclined to look at a low marging tracker rate rather than a fixed rate in your situation. You need to shop around.
We've been trying to check out all the rates etc but totally confused with different rates/options shown etc. and don't want to rely entirely on the mortgage broker.
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Start with tracker mortgages and see what is the best deal for your specific circumstances. Trackers are simple since the rate is basically ECB (currently/imminently 4%) + some fixed margin. Make sure to check the APR (not nominal rate) and/or cost per thousand (for the same term) when comparing offers from different lenders.
 
Thanks for your reply Clubman.

Did you never get any letter clarifying the rate and any subsequent changes? Did you never get annual statements that contained this info? You should write to them asking them what the current rate is?
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All we got was a one page letter to say our fixed rate term was up shortly and a listing of their current fixed rate options. We have received nothing since. This only happened in the last two months. The last statement we got was just another one pager detailing the mortgage amount left, interest paid this year and not much else. Recently requested a full statement so waiting for that to arrive.

Have you read the many other threads on the whole fixed versus variable/tracker rate question? I suspect that you should not since you don't seem to be under pressure with your mortgage repayments.
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I have read some of the threads. That's what is making me think that we shouldn't go with a fixed rate. Will read further though. Just gets a bit confusing when other mortgage sums are being mentioned.

Just need to sit down and really do our homework on this I guess. Not to mention get rid of the mental block about it all! :)
 
You can probably reverse engineer the rate that you're on by plugging the figures into Karl Jeacle's Mortgage Calculator but if I was you I would write to the lender asking them to clarify what the current rate is. If you have hassle getting this information then complain and, if necessary, raise the issue with the [broken link removed].

In my opinion you should only fix if you are under pressure with your mortgage or might be if rates increased by a few percent in the future. It sounds to me like you are more comfortably off financially that this (e.g. you can afford to reduce the term while remortgaging) which suggests that you might be better off with the most competitive tracker rate for your circumstances than fixing. Don't fix in an attempt to time the markets, second guess the financial institutions and save money over a competitive tracker rate over the medium/long term. Only do so if you really need to. Remember that fixed rates usually also involve penalties if you move again or want to reduce/redeem the mortgage before the fixed term us up.

Get tomorrow's Irish Times and check the rates listed in the property supplement. Ignore ones such as discount new business variable rates and endowment rates (if they still list these) and concentrate initially on the trackers.

If in doubt get independent, profesisonal advice.
 
I would advise you to shop around and see whats on offer, IIB may well want to retain your business and may very well try and match any offer you would get from another lender. You may be required to get an up to date valuation on your property to show LTV, but any lender will request this.
You broker will try and get you to switch as its in his interest, you need to be aware of this.
 
lmacbeth said:
All we got was a one page letter to say our fixed rate term was up shortly and a listing of their current fixed rate options.
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Sounds like AIB, they (I complained) give a list of rates, but leave out the best ones (ECB Tracker), so Mr Joe Bloggs just ticks the box for standard variable and sends the form back in.

Towger.
 
i just checked on NIB web site with details of 370,000 house value, 188,000 mortgage and 25 years, gives monthly payments of €1045 on their LTV tracked product. Just wanted to inform you about this because this product does not seem to be sold by brokers (don't know why). on a different note NIB 3 year fixed with same information brings out €1122

we recently switched from ptsb to nib, it was pretty quick compared to other forum participants' experiences.

you can use their panel of solicitors or they pay €600 towards your own.

good luck with your searches
 
Hi dublinli,

NIB don't distribute their products through brokers - you can only deal directly with them.
 
Received the account statement on our mortgage from IIB yesterday. No mention of the rate we are currently on. Would have thought it was an obvious piece of info to include, maybe not. :confused:

Rang them anyway to find out and we have been put on their standard variable rate of 5.2%. I enquired re their tracker rates and mentioned that I had been looking at other options, one being Ulster Bank (1st one that came in to my head!).

They are now to ring me back to see if they can match Ulster banks tracker rate for us which they said is lower than theirs but that they are keen to keep our business. (Hope Ulster Banks rate is fairly competitive now!).

So it will be interesting to see what option they come back to me with.
If it's decent I think we will probably stay put with them and avoid the hassle of switching. Although maybe that's being lazy about it.
 
Ulster Bank currently offer a tracker mortgage of ECB + 0.75%. At todays rates that equates to 4.75%.

Only problem with this rate is that its tied to Ulster Banks U First account which costs €9 per month.
 
What would be the point in switching if they were to match UB? Have you encountered any other issues during your time with them?
 
i would be inclined say shop around - take an afternoon off call to a few banks with your details and then call into your own bank and tell them that you are interested in moving as you think an alternative bank is offering a better product - the bank i think will "deal" with you and offer you trackers etc especially as you have a good LTV. Don't make a decision right away though - i noticed that really makes them itchy, tell them you have to discuss with other half.
if you have been happy dealing with your bank up until now it might be a case of better the devil you know.
 
Quest said:
What would be the point in switching if they were to match UB? Have you encountered any other issues during your time with them?
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I haven't had any issues with them as such - apart from them not being very informative with us of what rate we are on etc and only offering us more fixed rates when our fixed term was up... but it sounds like they're not the only ones doing that.

If I thought we were getting a fairly good deal with them I don't think there would be much point switching and it would also mean we could still switch again in a year of two if it was of benefit to us then.

Don't make a decision right away though - i noticed that really makes them itchy, tell them you have to discuss with other half.
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Oh I'm definitely not going to tell them straight away... I hope to compare what they offer to the other options out there and then let them know if someone else is still bettering them. I'm slowly learning you only get what you ask for!! Just have to toughen up. :eek:
 
Thought for interests sake that people might like to know that IIB got back to me and are offering us a tracker at .85 above the ECB which would save us €65 a month. Told them I'd have to discuss it with the other half anyway, that he was looking at other options also and we'll need to sit down and look everything over.
Lacked the courage (or whatever) when it came down to it to come straight out and ask if they could still do any better than that.... ridiculous I know. :eek:

Seems a decent enough offer though.

Can I ask one last question on fixed vs variable? (and if it's answered else where which it prob is just ignore it completely!).

I know the advice is generally not to fix unless you just can't afford any increase in rates but as some of the fixed rates are so low at the minute is now not a good time to fix given that the only way interests rates are likely to go is up ? Or am I totally misguided in that assumption?
I just feel myself completely torn between the two options !
What are the expert opinions on the likely increase of interest rates in the future. I know this can't be predicted 100% but there must be some indicators etc?
 
Hi - I would also be interested in whether you believe it is a good time to fix or go with a tracker....If the rate is predicted to go up at least twice in the next year and then again the following year - is it better to fix now seeing as the only way is up at the moment - I would could possibly be fixing at a higher rate next year or the year after? I am being offered a tracker rate of .8 above ECB....many thanks
 
hamishhardy said:
Hi - I would also be interested in whether you believe it is a good time to fix or go with a tracker....If the rate is predicted to go up at least twice in the next year and then again the following year - is it better to fix now seeing as the only way is up at the moment - I would could possibly be fixing at a higher rate next year or the year after? I am being offered a tracker rate of .8 above ECB....many thanks
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I would fix, ICS have a rate of 4.75% fixed to May 2009
 
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