Switching - case study

M

Manuel

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Isn't the whole point about variable rates that there are absolutely no guarantees?
If it helps anybody, I had a variable rate mortgage with EBS 5/6 years ago, which I watched in horror steadily rise to something like 4.3% I think while the ECB rate was steadily falling. (Ok, I can't remember exactly how the two rates moved relative to each other but I remember that it got to the stage where I decided I had finally had enough of EBS, and switched to BoI for a variable rate of 3.15%.)

No brainer?

First of all, the switching process was nothing short of torturous. The number of times I had to present more documents to BoI was just ridiculous. Anyway, after what was probably about 4-6 months I finally completed the switch.
Within a month or so, BoI increased my rate by 0.5%, and within a month or so after that, they increased it by another 0.5%.

I'm currently on 4.05% with BoI and it's very tempting to switch (back) to EBS and get my 2K cashback, which would come in very handy. But I'm very wary of just getting burned the same way again.

It's not laziness that stops me switching, it's fear. It's not that I couldn't be bothered going through the whole torturous process again, it's the risk - as I see it - that I might just be no better off at the end of it.
 
Hi Manuel

This is such an interesting story that I moved it from the other thread.

OK, the switching process took a long time. But did it take much work? It's frustrating to be asked for more information, but it doesn't take long to produce it.

This is a key point. People say that it's a lot of work to switch. I don't believe that it is. It just that a lot of time elapses. But you are not working on it full time for 4 months.

Brendan
 
I accept that Brendan. I guess my salient point was that in a shorter period of time than it had taken me to complete the switch, the circumstances then changed so much that it was barely worth the effort in the end. Granted, this was back when I also had to pay my own legal fees ....
 
Apparently the Central Bank is researching the whole issue of mortgage switching and is due to complete this work early next year.

In my opinion, we badly need a code to standardise and streamline the whole switching process - it simply takes far too long to complete a switch. An Italian home loan borrower can switch mortgage provider within 30 days and there is no good reason why this could not be replicated in Ireland.

I really think you should grit your teeth and switch but if you simply can't bear to go through the whole process again, then take a one year fix with BoI.

Don't stay on your current rate!
 
My two cents. I switched in 2010 using a broker. Apart from a few forms I had to specifically apply for I had a checklist and sent them to the broker by mail. The only work for me was to go to the solicitors office for an hour or so and sign forms and produce my passport for ID. All contact was made either by email or phone and was not hard work. I paid for my own legal fees so if I thought I could make a few hundred straight away by getting the 2k I would jump at the chance.
 
Manuel said:
I'm currently on 4.05% with BoI and it's very tempting to switch (back) to EBS and get my 2K cashback, which would come in very handy. But I'm very wary of just getting burned the same way again.
Click to expand...
Manuel said:
It's not laziness that stops me switching, it's fear.
Click to expand...

My input for what it is worth.
1. You should not be on a variable rate with BoI. They have said time and time again they have no plans to be competitive in this market. Either you need to move to a fixed rate or switch to a bank which is committed to variable rates
2. I personally am not sure if I would switch to EBS. The 2% cashback is attractive, but they have not shown a commitment to treat existing and new customers equally. AIB have (in principle at least) and I think you should consider them as a realistic alternative.
3. If you are in a position to switch, you should do so any time it makes financial sense to do so. We wont always get it right (I got it partially wrong with KBC), but that is life. As long as we learn from our mistakes its a positive

So get away from variable with BOI, no matter where you go

Finally re time - I switched in 2015, and cumulative hours wise it was probably 10-12 or so, and I am self employed. Its a slow process I agree, but effort wise it is not massive. If it can be tied into a end of year financial review it would probably be even less effort as the details would be readily available :)
 
Probably a stupid question but do you need to have 80% LTV to switch or will the banks consider you if you sit around 85-90% LTV
 
General question please:
I do intend to switch early this year, but what would really swing it for me would be the chance to free up a bit of equity in the house for home improvements (read "finishing the bloody house") ....
I owe 140,000 and the house is worth ~200,000, so I presume the lender would have no issue with me taking out a 150,000 loan within the same LTV bracket (75% v 70%)?
I did it the last time I switched, so just wondering if since then the banks now frown upon the practice of giving out a switcher loan for more than I owe? I presume not ...
Thanks!
/M.
 
@Manuel If I was you I would go into your preferred bank and ask them what they would do for you. I don't believe it will be an issue but depends on a number of other factors.
 
BOI do home improvement loans over 10 years which isn't quite a mortgage but it might help if all else fails.
 
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