Key Post: First Active mortgage/current account

Re: FA mortgage account

hi Sarah

slightly off-topic, but perhaps Sarah could comment

you say

Reducing a mortgage term is OK but if you increase the term you have to lenghten your mortgage protection
Click to expand...

does this mean that if you reduce the term of a mortgage from, say, 20 to 10 years, by arrangement with your lender, do your mortgage protection payments reduce to take account of the reduced mortgage term.
 
Re: FA mortgage account

As far as I know... If you reduce the effective term through accelerated regular or lump sum repayments then the original mortgage protection life assurance policy usually remains in place and the same premiums apply. However maybe you can arrange a new shorter/cheaper policy and cancel the original one? In any case, once the mortgage is cleared, even if this is before the original term agreed, then mortgage protection life assurance is no longer required - i.e. you can let the policy lapse or exercise the conversion option on a convertible term policy.
 
Re: mortgage (insurance) protection

I was thinking about this recently. I have just passed 5 years of a 20 year mortgage, but I have reduced the remainder to 9 years.

Can somebody elaborate on what my options are on a fixed 20 year mortgage protection policy? Do I have to kepp paying it for the remainding 15 years.

Thanks

S.
 
Re: mortgage (insurance) protection

My understanding (and experience from redeeming a mortgage early) is that once the mortgage is paid you can decide whether or not to continue a level term life assurance policy to the original term or, in the case of a convertible term policy, decide whether or not to exercise the conversion option. I presume that a decreasing term policy ceases once the loan has been repaid in full. from the archives contains a good explanation of the different types of mortgage protection life assurance policies (decreasing, level and convertible term) in case you're not familiar with them.
 
Re: First Active mortgage/current account

See Shane Ross's verdict on this product here

Edited by ClubMan to fix link.
 
Re: First Active mortgage/current account

I see the Sunday Tribune reckoned that one would need to maintain an average balace of c. €5,000 in the facility account over the lifetime of the loan in order to offset FA's higher interest rate compared to other cheaper rates currently available, and consequently more than that in order to start saving on interest costs.
 
Mortgage with FA

I have a mortgage with FA and I have been reading these posts wiht great interest. My 2 yr fixed rate is ending this August. I am worried that I amy not be getting the best deal with FA. We borrowed €120,000 and the repayments over 25 yrs are €640 pm ( after TRS). Should I go for another fixed rate term, variable or should I be looking to change my mortgage provider?
 
Re: Mortgage with FA

You (or somebody else here on your behalf) would need to do a bit of number crunching to see how much it could cost (e.g. legal fees etc.) you to remortgage with a cheaper lender versus how much you stand to save (assuming current rates/margins) in order to assess if it would be worth it. As far as I know First Active are one of the most expensive variable rate lenders. I don't know where they stand in terms of fixed rates. Have a look at [broken link removed] to compare mortgage rates.

As regards fixed versus variable rates, trying to predict future rate behavious is a fruitless task and as soon as you think you know which way they're going they will most likely have been priced accordingly. Unless you are struggling to meet your mortgage repayments or would be if rates increased by, say, a couple of percentage points then you will usually be better off (in terms of cost and flexibility - e.g. making accelerated or lump sum repayments without penalty) in the long term sticking with the best variable rate available.
 
Re: Mortgage with FA

Hi Rex22,

If your mortgage represents less than 60% of your home value, you can get a variable rate of 3.7% (APR 3.8%) from Ulster Bank. My rough calculations suggest that this will be around €35 per month (gross) cheaper than First Active. Re-mortgaging will cost you around €1,200 depending on your solicitor so it would take you around 3 years to recoup the cost, assuming First Active don't get more competitive in the meantime.

If you earn more than you spend each month, or tend to keep a lump sum on deposit for "rainy days" you could consider switching your mortgage to First Active's current account mortgage product. Cost of switching is much lower because it's already a First Active mortgage. Whether or not it will beat the UB alternative over time depends very much on your own spending and saving habits.

Liam D Ferguson
www.ferga.com
 
Re: Mortgage with FA

I had an idea Liam might do the number crunching! ;)

you can get a variable rate of 3.7% (APR 3.8%) from Ulster Bank

Is that UB's tracker rate? What's the guaranteed margin?
 
Re: €5,000 figure

Hi Clubman,

Just to clarify - the €5,000 figure mentioned in the Tribune was based on the following example - if someone with a €150,000 mortgage lodged €5,000 into the mortgage 3.5 years into it's term and left it there, the total interest bill after 20 years would be less than on AIB's 3.85% mortgage. This also assumes that AIB maintains it's 0.39% rate advantage over First Active at all times during the period.

Regards,

Liam D Ferguson
www.ferga.com
 
Re: €5,000 figure

Hi ClubMan,

I see we're back to crossing posts!

Ulster Bank rate of 3.7% contains a margin guarantee that the rate will never exceed 0.95% above ECB.
 
FA

I got the 'blurb' from First Active & spoke to one of their guys. It appears that the concept of funds being 'swept' from the current account to the mortgage account was rubbish. They don't do any such thing. Apologies for any confusion caused.

I'm just waiting for further details from them on the current a/c charges.
 
Re: First Active mortgage/current account

I got the details of the account charges from First Active - they certainly seem to be on the steep side.
Code: 
Quarterly Maintenance Charge        €6.35
Transaction Fee (Laser/ATM/DD/SO)   €0.24
Funds transfer to/from Mortgage     €0.24
Standing Order/Direct Debit Setup   €3.40
Standing Order/Direct Debit Change  €1.25
Etc etc etc

Edited by ClubMan to fix tabular data formatting.
 
Re: First Active mortgage/current account

Standing Order/Direct Debit Setup €3.40

Well that one's cheaper that the €5 PermanentTSB charged me for a DD setup! :eek
 
FA current account mortgage

I got the FA data today and noticed something else that they did'nt elaborate. You can't get an overdraft facility. They give you an 'equity release' instead if you get upfront approval. This sounds like an increase on your mortgage in the loan account which you will pay back over the duration of your mortgage. I'm not sure if they will allow you to refund the 'equity release' easily or at low cost should you have the wherewithall say the following month.

Can anybody throw light on this?
 
FA current account mortgage

You could lodge it into the current (facility) account. It has the same effect as a repayment. Also if you were worried about needing occasional overdrafts and you were willing to be careful about it you could adopt the strategy I outlined earlier...

saver
 
Re: FA current account mortgage

This week's Sunday Tribune reports that NIB are about to launch a current account mortgage in the Irish market - the first significant new product NIB have launched since the takeover by Danske bank was announced. Let's cross our fingers that this won't impact the discounted rate offered to [broken link removed]
 
Re: FA current account mortgage

See [broken link removed] for more details of NIB's 'offset' mortgage - seems like a no-brainer, assuming the same rates as my existing NIB mortgage applies.
 
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