Weighing up a switch

M

Mackemdub

Registered User
Messages
87
After a few years of struggling with the worries of negative equity I'm shortly to be in the fortunate position of being able to switch.

My current O/S balance with Haven is c.€500k with monthly repayments of about €2,730, MIL nets this to €2,580 until end 2017. SVR 3.4%.

Thanks to family loan and savings an extension is underway and indications are value on completion will be €625k plus, giving roughly 80% LTV - should be just under €500k by year end.

Notwithstanding what might happen to AIB/Haven SVR for remainder of 2016 (which i don't believe will be much) the BOI 3 year <80% fix at 3.1% (gross c.€2,650 net c.€2,500pm) is starting to look attractive with their Cash Back plus incentive (on the €500k this would be €10k on DD and €5k after year 5).

I'm thinking of switching early next year, fixing at this rate for 3 years and then seeing where things are after that with BOI with the view of potentially switching again once the 5 years is up with BOI if needs be. Interest rate forecasts (for what they're worth) don't seem to see rates moving until 2020/21, even only a small increment by then. I know BOI are shocking for SVRs but their fixed rates are some of the best at the moment.

All this is on the assumption that BOI will allow me to switch to them and LTV comes in <80% obviously.

Any thoughts?
 
3.10% looks attractive, but there is a reason why the APR for that rate is 4%, and that is because it defaults onto the variable rate, following the fixed period. The big assumption you are making is that you will be able to switch from BOI in the future, if and when your mortgage goes on to their SVR (currently 4.20% for 61-80% LTV). If your circumstances change, there is no guarantee of qualifying to switch to a new lender. I always advise people to lock in the best long-term value for their mortgage. At the moment, the best long-term value in your situation would be the Loyalty Variable rate of 3.10% from Ulster Bank.

Best Regards,
Dave Curry, Irish Mortgage Corporation
https://ie.linkedin.com/in/davecurryirl
 
thanks for the feedback Dave, makes sense (but i am being tempted by the cashback and (possible overconfidence) of situation not deteriorating!)

i must work out how much SVR change i'd need to miss out on to make the initial €10k cashback a loss-leader!!
 
You must log in or register to reply here.
Back
Top