BOI "Green Rate" 3.65% vs Avant 4% - Four Year Fixed

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LocationStation

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I am a FTB with AIP from BOI and Avant.

I want to fix for 4 years. My options are BOI @ 3.65% Green or Avant @ 4%. BOI would be c. €100 cheaper per month.

I read the key post and noted Brendan's advice to avoid BOI/PTSB as they are unlikely to be good value over entire term.

Indeed, BOI's variable follow on rate currently is 4.2% for existing customers. Avant's is 3.95%.

I am reluctantly going to go with Avant and pay the higher rate for four years as I am concerned about having to switch in 4 years. Circumstances could change.

Is my logic sound here?
 
€100 per month will cost you €4,800 over the initial 4 year period - c. €9,600 in gross income - personally I'd take the cheaper option and review the situation in 4 years time...
 
It is the case that since Avant joined the market they generally offered one of the lower set of rates on the market. However, based on what you've provided above that isn't the case right now. Likewise, who knows who will offer what in 4 years (or beyond). So I would be inclined to just focus on what is on offer right now. Then again I've never been overly put off by switching if the savings made sense.

Without knowing the term and mortgage amount it's hard to give you a precise answer but - based on the interest rates listed - it would have to be a very small mortgage for the savings made from going with BOI over the four years not to eclipse the typical cost of switching. If you had to in.

Other factors to consider are cashback offers. I don't believe Avant offers such incentives to FTBs. If BOI's green mortgage attracts the 3% cashback it would further strengthen the case for BOI.

I've not kept up with who offers what these days but any reason why it's only BOI and Avant you're comparing?
 
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The loan would be 500k over 35 years.

My fear is not the cost of switching in four years but rather the concern that we may not be able to switch if our circumstances changed (health or employment) or due to macro factors like a credit crunch etc

Perhaps I am overthinking this massively but I am trying to look at the best option for the life of the mortgage, if we somehow could not switch.

I referring to the key post here where Brendan recommends avoiding gimmicky/unfair lenders that do not offer best rates to existing customers https://www.askaboutmoney.com/threads/mortgage-rates-tables-for-all-lenders.231712/
 
With regards BOI he says "High variable rates mean you are forced to fix which means you are , in effect, forced to stay with them for another few years and stuck on a higher rate than new customers".

I'm not sure I understand why you would be forced to fix with BOI again when your initial fixed term offer expires. Is he implying that no other lenders could be taking new business at the time so you can't switch?
Anyway I would take the best rate you can get now and then see where things are in 4 years time
 
Harvard said:
I was shocked at how high this had gone considering it was 2.1% less than 2 years ago.
Click to expand...
For sure.

I remember suggesting a couple of years ago that we might well look back at those cheap fixed rates with some envy.

Key Post - Should borrowers with trackers consider fixing? (General guidelines)

It seems increasingly likely that we are going to see a series of rate hikes by the ECB in the near future. According to Philip Lane, ECB chief economist - "I think it’s clear that at some point we’re going to be moving rates, not just once, but over time, in a sequence." If the ECB raise the...
www.askaboutmoney.com
 
Sarenco said:
For sure.

I remember suggesting a couple of years ago that we might well look back at those cheap fixed rates with some envy.

Key Post - Should borrowers with trackers consider fixing? (General guidelines)

It seems increasingly likely that we are going to see a series of rate hikes by the ECB in the near future. According to Philip Lane, ECB chief economist - "I think it’s clear that at some point we’re going to be moving rates, not just once, but over time, in a sequence." If the ECB raise the...
www.askaboutmoney.com
Click to expand...

I'm very happy I managed to lock into that rate at the time. It beggars belief that more people on variable rates didn't fix, when ample evidence pointed to rates only going one way from early 2022.
 
LocationStation said:
The loan would be 500k over 35 years.

My fear is not the cost of switching in four years but rather the concern that we may not be able to switch if our circumstances changed (health or employment) or due to macro factors like a credit crunch etc

Perhaps I am overthinking this massively but I am trying to look at the best option for the life of the mortgage, if we somehow could not switch.

I referring to the key post here where Brendan recommends avoiding gimmicky/unfair lenders that do not offer best rates to existing customers https://www.askaboutmoney.com/threads/mortgage-rates-tables-for-all-lenders.231712/
Click to expand...

You'll know your circumstances (health issues, employment risk) better than anyone else but based on the numbers at hand you'll save close to €7k in interest by going with BOI (before any cashback offers are considered).

All things being equal Brendan's point stood but all things are not equal now. Interest rates increased and the lenders funding costs also changed. BOI can fund itself from a pool of cheap customers deposits. Avants funding is more price sensitive. Yes that could all change in four years but not one knows what that will look like today.
 
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